You’ve just wrapped up a client meeting at a Java in Westlands, or maybe you’re a digital creator cashing out from YouTube. The hustle is paying off. But then that familiar, nagging thought hits: what about my tax returns? If terms like “iTax,” “Turnover Tax,” or “provisional income” make you want to close the tab, relax.
This guide is for you—the freelancer, consultant, content creator, or small biz owner. We’ll walk you through exactly how to file tax returns as a self-employed person in Kenya, from registration to hitting submit, without the jargon.
Why Bother? The Real Cost of Skipping Your Tax Returns
Let’s be real, the temptation to ignore KRA is strong. You’re busy, and the money feels better in your pocket. But the penalties are no joke. The Kenya Revenue Authority (KRA) can hit you with fines of up to Ksh 20,000 for late filing, plus 5% interest on any tax owed. Worse, they can freeze your bank accounts.
Filing isn’t just about avoiding trouble. It builds a financial track record. This is crucial when you need a loan from a bank like Equity or Co-op to scale your business. A clean tax compliance certificate (TCC) is your golden ticket. Think of it as proof you’re a serious player, not just another side hustle.
Getting Started: Your KRA PIN and iTax Profile
First things first, you need a KRA PIN. If you don’t have one, apply online via the iTax portal. It’s a straightforward process. Once you have your PIN, log into iTax. The dashboard might look intimidating, but focus on the “Registration” tab.
Here, you’ll register for the specific taxes that apply to you. For most self-employed folks starting out, this is likely to be:
- Turnover Tax (TOT): For annual business income between Ksh 1 million and Ksh 50 million. It’s a simple 3% of your gross sales.
- Income Tax (Provisional Tax): If your income is above Ksh 50 million annually, or you choose not to be under TOT.
- Pay As You Earn (PAYE): If you have any employees.
Select what fits your current hustle. You can always amend it later as you grow.
The Step-by-Step Guide to Filing on iTax
Filing your annual tax return is done through the iTax portal. The main form for self-employed income is the IT1C Form for Business Income. Don’t panic at the sight of it. Here’s your action plan.
1. Gather Your Documents (The Kenyan Way)
Before you even login, get your records together. This isn’t about fancy accounting software (though it helps). A simple, well-kept M-Pesa statement, bank statements (from your KCB or Absa app), and a kibanda notebook tracking your invoices and expenses will work. You need to know your total income and your allowable expenses for the year.
2. Filling the IT1C Form: Income & Allowable Deductions
This is the core of how to file tax returns as a self-employed person in Kenya. You’ll enter your gross business income. Then, you list your deductible expenses. These are costs wholly incurred in generating your income. Common ones include:
- Rent for your business space (even a dedicated home office).
- Utilities like internet (from Safaricom Home or Zuku) and electricity (KPLC bills).
- Transport and fuel costs (keep those receipts from the petrol station).
- Office supplies and equipment (that laptop, printer paper).
- Marketing and advertising costs (even boosting a Facebook post).
The key is to be honest and have a receipt or record to back it up if KRA ever asks.
3. Calculating What You Owe (Or Your Refund!)
The iTax system will automatically calculate your tax liability based on the current individual tax bands. After deducting any advance tax or installment tax you may have paid during the year, you’ll see your final position. You might owe money, or you might be due a refund if you overpaid. The system makes this clear.
4. Submission, Payment, and Getting Your TCC
Once you submit, if you have a balance, pay immediately via M-Pesa (Paybill 572572), your bank’s PesaLink, or debit/credit card on iTax. Do not delay payment. Filing without paying is incomplete. After successful payment, you can instantly download your Tax Compliance Certificate (TCC) from the iTax dashboard. That’s it, you’re done for the year!
Kenya-Specific Hacks and Realities You Must Know
This isn’t a generic guide. Here’s the real talk for operating in the Kenyan context.
Deadlines Are Not “African Time” with KRA
The deadline for filing your annual return is 30th June of the following year. Mark it in your calendar like a major client deadline. A pro-tip: file by early June. Why? The iTax portal often gets sluggish or crashes in the final days as everyone rushes. Trying to file on June 30th at 10 PM is a recipe for frustration and potential late penalties.
Leverage the Huduma Centres and Cyber Cafés
Stuck? Your laptop crashed? Don’t suffer in silence. Pop into your nearest Huduma Centre (like the one at GPO in Nairobi or in your county headquarters). They have KRA help desks. Alternatively, a trusted cyber café operator in town has probably helped dozens of people file returns. They know the common pitfalls on the iTax portal. It might cost you Ksh 200-500, but it can save you hours of headache.
Seasonal Income? Plan Your Provisional Tax
Many Kenyan hustles are seasonal. Maybe you’re a photographer booming during wedding season (dry months), or you sell goods that peak during December holidays. If your income isn’t steady, planning for your provisional tax installments (due in April, June, September, and December) is crucial. Set aside a percentage of each big payment during your high season to cover the dry spell installments. It beats a nasty surprise when the installment is due.
Common Pitfalls to Avoid (Save Your Money!)
Learn from the mistakes of others so you don’t pay the price.
Mixing Personal and Business M-Pesa
Using the same M-Pesa line for your mama mboga orders, sending school fees, and receiving client payments is a tracking nightmare. Get a separate Safaricom line for your business, even if it’s a simple second SIM. It makes reconciling your income infinitely easier and looks more professional.
Forgetting to Claim All Deductions
That boda boda trip to deliver a product to a client? Deductible. The airtime you bought specifically for client calls? Deductible. The 5% withholding tax a corporate client deducted from your invoice? That’s a credit against your final tax bill. Keep every receipt, no matter how small. A simple folder or a photo album on your phone dedicated to receipts will save you thousands.
Ignoring the “Nil Return”
Had a tough year with little to no income? You must still file a “Nil Return.” This tells KRA you’re still in business but didn’t make taxable income. Failure to file at all, even for a nil return, leads to non-compliance penalties and a blocked PIN. It takes 10 minutes to file nil. Do it.
When to Get Professional Help
There’s no shame in calling in the experts. If your business is growing, your income streams are getting complex (maybe you’re now earning from YouTube, affiliate marketing, and consultancy), or you just hate numbers, hire a certified tax agent. Their fee (typically from Ksh 5,000 to Ksh 15,000 annually for a small business) is tax-deductible and can save you from costly errors. They handle everything, giving you peace of mind to focus on your hustle.
Filing your tax returns as a self-employed Kenyan is a non-negotiable part of the professional journey. It’s not the most exciting task, but it’s a powerful sign you’re building something legitimate and lasting. By now, you know the process: get your records straight, log into iTax, honestly declare your income and expenses, and hit submit before the June deadline.
The relief of being compliant, having a valid TCC, and knowing your finances are in order is better than any temporary avoidance. Your next step? Bookmark the iTax portal on your phone, block out one hour this week, and start gathering those M-Pesa statements. Get it done, then get back to growing your empire.