KRA iTax Nil Returns refer to tax returns filed by individuals or businesses who have not earned any income or have no tax liability to the Kenya Revenue Authority (KRA) during a particular tax period. Essentially, this means that the taxpayer is informing the tax authority that they have no taxable income or tax liability, but are still complying with the tax regulations by filing Nil Returns.
Filing KRA iTax Nil Returns in Kenya is a relatively simple process that can be completed online through the iTax platform.
Steps How to File Nil Returns:
- Obtain a KRA PIN: To file Nil Returns, you must have a KRA PIN. If you do not have one, you can obtain it by visiting the KRA website and registering for one.
- Register for iTax: Once you have a KRA PIN, you must register for iTax by visiting the KRA website and clicking on the iTax link. Follow the prompts to register for iTax.
- Understand the deadlines: The deadline for filing Nil Returns is 30th June of the following year after the tax period. For instance, the deadline for filing Nil Returns for the tax period of 1st January 2022 to 31st December 2022 is 30th June 2023.
- Log in to iTax: After registering for iTax, log in to your account using your KRA PIN and password.
- Select “Returns”: On the dashboard, select “Returns” and then click on “File Nil Return” from the drop-down menu.
- Select the tax obligation: Choose the tax obligation for which you want to file Nil Returns. For instance, if you are an individual, you would select “Individual Income Tax” and then select the relevant tax period.
- Fill in the Nil Return form: Fill in the Nil Return form by providing your personal details and indicating that you have no taxable income or tax liability for the relevant tax period.
- Submit the form: Once you have filled in the form, review it to ensure that all the details are correct. Then, click on “Submit” to complete the filing process.
- Receive confirmation: You will receive a confirmation message that your Nil Return has been filed successfully.
Consequences of Not Filing Nil Returns
- Penalties and Fines: One of the main consequences of not filing Nil Returns is the imposition of penalties and fines by the KRA. The penalties for failing to file Nil Returns can be as high as Ksh. 20,000, with an additional penalty of Ksh. 1,000 for each day that the return remains unfiled. These penalties can quickly add up and result in significant financial losses for taxpayers.
- Inability to obtain certain government services: Failure to file Nil Returns can also result in the inability to obtain certain government services. For instance, taxpayers may be unable to renew their business licenses, apply for tenders, or obtain certain permits from government agencies. This can have a significant impact on the operations of businesses and individuals.
- Negative impact on credit score: Another consequence of not filing Nil Returns is the negative impact on credit scores. In Kenya, credit reference bureaus (CRBs) use tax compliance records as part of their credit scoring algorithms. Failure to file Nil Returns can, therefore, result in a lower credit score, which can make it more difficult to obtain loans, credit cards, or other financial services.
Conclusion
Filing KRA iTax Nil Returns in Kenya is a crucial aspect of maintaining compliance with tax regulations. By following these simple steps, you can file Nil Returns online quickly and efficiently, avoiding penalties and fines from the KRA.
