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Tax is a financial charge that is often imposed by either the national or county governments on individuals or businesses aimed at funding public expenditures. The Kenya Revenue Authority (KRA) is the body mandated with collecting, assessing and accounting for the revenue in Kenya on behalf of the state. Different types of iTAX KRA online returns
Kenyans generally pay two types of taxes: Direct and indirect taxes.
Direct taxes are the amounts you remit directly to the government as income tax.
Indirect taxes are those charges that you pay when you buy goods and services and they include Value Added Tax (VAT), excise duty, and custom taxes.
The following are the different types of iTAX KRA online returns.
- KRA iTax return forms for Resident Individual – Income Tax
- KRA iTax return forms for Non-Resident Individual – Income Tax
- KRA iTax return forms for Company – Income Tax
- KRA iTax return forms for Partnership – Income Tax
- KRA iTax return forms for PAYE – Income Tax
- KRA iTax return forms for – Turnover Tax – Income Tax
- KRA iTax return forms for Value Added Tax (VAT)
- KRA iTax return forms for Excise
Let us understand each of the above KRA return forms in Kenya.
KRA iTax return forms for Resident Individual
This KRA tax return is applicable to all the resident individuals who are taxed on the whole income earned in respect of any employment or services rendered in Kenya or outside Kenya. This also include any other income that has accrued in or derived from Kenya.
KRA iTax return forms for Non-Resident Individual
For Non-resident taxpayers, the income earned from within Kenya or derived from Kenya is taxable. A Non-Resident Individual need to select ‘Income Tax – Non-Resident Individual’ from the KRA tax return types in KTA online returns.’
KRA iTax return forms for Companies
The type of income tax levied on corporate bodies is known as a corporate tax. This will be levied on corporates such as limited companies, trusts and co-operatives. The resident companies are taxable at the rate of 30% while non-resident companies are taxable at the rate of 37.5% on their taxable profits.
KRA iTax return forms for Partnership
Partnership income is not taxable for Income Tax purposes. This is because, the share of partnership income is taxable in the hands of the partner at the prevailing individual income tax rates. In other words, the income is not taxable at the entity level, instead, it is taxed in the hands of individual partners. Though the income is not taxed at the entity level but as a partnership firm, you need to file a separate partnership return.
KRA iTax return forms for PAYE
PAYE stands for ‘Pay as You Earn’. It is a method of tax deduction by employer on employee’s salaries or wages and applies to all income from any office or employment. It applies to weekly wages, monthly salaries, annual salaries, bonuses, commissions…etc. The tax deducted should be paid on monthly basis and employer need file a return disclosing the details of tax deducted. To file iTax PAYE returns, you need to select the ‘Income tax – PAYE’ in types of KRA iTax returns.
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KRA iTax return forms for filing turnover tax
In order to provide a simpler compliances for small business, the government has introduced a tax scheme known as ‘Turnover Tax’. This is applicable for businesses whose income from the business is above KSh 500,000 but does not exceed 5,000,000. The businesses opting turnover tax need to pay tax at a fixed rate on gross income earned by them.
KRA iTax return forms for filing VAT returns
All the businesses with KSh 5,000,000 or more in last 12 months or anticipates to attain the KSh 5,000,000, are mandated to register under VAT. The Act also provides for voluntary registration where a taxpayer chooses to register despite the turnover falling below Kshs.5,000,000. All the VAT Registered businesses are required to declare the details such as VAT charged on sales, VAT paid on purchased etc.
KRA iTax return forms for filing Excise returns
In Kenya, the Excise duty is imposed on notified goods manufactured or imported into Kenya. There are different excise duty rates depending on the product imported or manufactured. The details of excise duty levied should be declared in monthly excise return on before 20th of the subsequent month.
How to to File KRA Tax Returns on iTax in 2020
Did you know that it is quite easy to file your tax returns without having to get stuck on long queues at Kenya Revenue Authority (KRA) offices every year?
Through KRA’s now-famous platform dubbed iTax, you can file your returns from the comfort of your couch. Individual Income tax returns need to be submitted by the June 30, deadline.
Avoid incurring the Ksh2000 fine imposed on late filing by following the step-by-step guide below.
Filing Individual Tax returns on iTax
Submission of income tax returns is an online process done via iTax
1. Open your browser and go to
2. Enter your KRA PIN, click Continue. Enter Password and Security Stamp ( answer to arithmetic sum) and Click Log In
3. Go to Returns Menu and select ITR For Employment Income Only
4. Enter Return Period, select ‘Yes’ to the question ‘Do you have employment income?’ and Click ‘Next’
5. Under basic information, answer the questions asked appropriately and Click ‘Next’
6. Go to Section F, details of employment income and confirm the name and PIN of employer, Gross Pay and other allowances as per your P9 form.
7. Go to Sheet M, details of PAYE deducted, confirm Employer details, Taxable salary, chargeable pay, Tax payable on taxable salary and PAYE deducted. Details can be modified as per your P9.
8. Go to Section Q and capture a payment if any, made prior to the filing of the return.
9. Go to Section T, Tax Computation, Enter defined/pension contribution amount (as per your P9 actual contribution by employee) and personal relief. Click ‘Submit’ and download the E-return acknowledgment receipt.
Filing Nil returns
Nil income tax returns help the taxman identify all taxpayers that fall below the taxable income or are unemployed and earning no salary that include university students. The minimum taxable income in Kenya is Ksh. 12,000.
Here’s how to file KRA nil returns online:
1. Type ‘iTax’ on your Google search tax and click on the KRA iTax website www.itax.kra.go.ke
2. Enter your KRA PIN, click Continue. Enter Password and Security Stamp ( answer to arithmetic sum) and Click Log In
3. After logging in, scroll to the navigation bar and select ‘e-returns’, which will open a set of options. Underneath the options, scroll downwards and click on ‘file nil returns’.
4. AFTER Log in, update the professions menu then return to file NIL Return.
5. On the taxpayer PIN, insert your KRA pin and on the ‘Tax Obligation’ option insert ‘Income Tax resident.’ then submit.
6. Select Tax obligation and next fill in the returns period from and return period to will be populated obligation time frame then click submit button.
7. If the process is successful, an acknowledgement receipt of e-returns will appear following a successful submission message.
8. Download the returns receipt and you are done.
Filing PAYE (Pay As You Earn) returns
PAYE (Pay As You Earn) is a method of tax deduction from employees’ salaries or wages and it applies to all income from any office or employment.
Here’s how to file KRA PAYE returns online:
1. Log on to from your browser
2. Enter your KRA PIN, click Continue. Enter Password and Security Stamp ( answer to arithmetic sum) and Click Log In
3. Under the returns section, click on file returns then select income Tax followed by the PAYE option.
4. Click on the returns tabs and then the last item ITR for employment income
5. Fill in the sections marked with a red asterisk on Section A.
6. Then in section T only two sections are necessary section 1.1 and 2.5
7. Then Move to Section F fill out Total Employment Income.
8. Click on the section M tab and check that taxable salary, tax payable on taxable salary and tax deducted salary tally the information reflected on the P9.
9. Next in Section Q fill in the tax paid in advance if applicable. This is the last section of filling in the return. Once complimented click submit.
10. If successful you will get a tab saying, “return slip generated’. You can click on the download returns slip to get your slip.
It’s that simple! types of iTAX KRA online returns
In the event you misplace your PIN or password, you can simply reset it by entering your KRA Pin and click on the ‘Forgot Password/Unlock Account’. You will then be issued a new password which you will need to change immediately.
Kenyans generally pay two types of taxes: Direct and indirect taxes.
Indirect taxes are those charges that you pay when you buy goods and services and they include Value Added Tax (VAT), excise duty, and custom taxes.
When should you start paying taxes?
1. Income tax
As long as you are 18 years old, and have an income, you are required by law to pay and submit your taxes.
Here is a breakdown of the Income-tax
Income tax is imposed on;
- Business income from any trade or profession
- Employment income
- Rent income
- Investment income
- Income from services rendered among others
- Pensions among others
How is Income tax collected?
Income tax is collected in different methods based on the companies’ sources of income.These methods include:
a.) Corporation Tax
This is a form of Income Tax that is levied on corporate bodies such as Limited companies, Trusts, and Co-operatives, on their annual income.
Companies that are based outside Kenya but operate in Kenya or have a branch in Kenya pay also pay Corporation Tax on income accrued within Kenya only.
b.) Pay As You Earn (PAYE)
This is a method of collecting tax at source from individuals in gainful employment.
Companies and Partnerships with employees are required to deduct tax according to the prevailing tax rates from their employees’ salaries or wages on each payday for a month and remit the same to KRA on or before the 9th of the following month.
You should note that PAYE applies to bonuses, directors’ fees, commissions, weekly wages, and monthly and annual salaries.
Every employee is eligible for a tax credit often referred to as a personal relief. Also, KRA offers insurance and mortgage relief for qualified individuals.
Furthermore, the KRA expects the taxpayer to file their returns after every year, before 30th June.
How does KRA calculate PAYE?
The monthly taxable income varies for everyone depending on the amount of their income.
For instance, a taxpayer earning Kshs 11,180 and below will remit 10 per cent of their earnings to KRA.
Somebody earning Kshs 11,181 to Kshs 21,714 will remit 15 per cent.
A Kenyan earning Kshs 21,715 to Kshs 32,248 is required to pay 20 per cent of their earnings to KRA while those earning Kshs 32,249 to 42,781 are supposed to pay 25 percent of their total earnings to the taxman.
Kenyans earning Kshs 42,782 and above will remit 30 per cent of their gross salary to the KRA.
c.) Withholding Tax (WHT)
This kind of tax is deductible from certain classes of income at the point of making a payment, to non-employees.
Companies and partnerships making these payments are responsible for deducting and remitting the tax to the Commissioner of Domestic Taxes.
WHT is chargeable on:
- Dividends
- Royalties
- Management or professional fees (including consultancy, agency or contractual fees)
- Commissions
- Pensions
- Rent received by non-residents
- Other payments specified
How much rate do residents pay on WHT taxes?
- Dividend Income (10%)
- Quality Dividend (5%)
- Royalties (5%)
- Consultancy/agency fees (5%)
- Contractual fees (3%)
- Interest from bearer instruments (25%)
- Interest from government bearer bonds (15%)
- Qualifying interest from housing bonds (10%)
- Qualifying interest from bearer instruments (20%)
- Insurance brokers’ commissions (5%)
- Insurance Agents Commissions (10%)
How much rate do non-residents pay on WHT taxes?
- Dividend Income (15%)
- Royalties (20%)
- Rent Premium for Immovable Property (30%)
- Rent Premium for Movable Property (15%)
- Management and Professional Fees (20%)
- Pension/retirement annuity (5%)
- Appearance or performance fees (20%)
- Supporting/arranging an appearance (20%)
- Management or Professional fees (12.5%)
- Interest on bearer instruments (20%)
2. Advance Tax
This is a tax paid in advance before a public service vehicle or a commercial vehicle goes for the annual inspection.
This is a tax is paid in advance and caters to the public service vehicles and matatu.
The owners pay the tax in advance before they can register their commercial vehicles (PSV).
The Current rates for vans, trucks, lorries, pickups are Kshs. 1500 or Kshs 2400 per ton of load capacity per annum.
The rates for station wagons, saloons, minibuses, coaches are Kshs 60 per passenger capacity each month, or Kshs 720 per passenger per annum.
3. Installment Tax
Installment tax is paid by persons who have tax payable for any year that amounts to Kshs. 40,000 and above.
4. Rental/Residential Income Tax
This is a tax charged on rental income received from renting out property. Taxation of rental income depends on how the rented property was used for residential or commercial purposes.
Companies and Partnerships that rent out property to other persons for either residential or commercial use are required to pay income tax on rent received
To facilitate compliance, KRA appoints agents to withhold and pay, a percentage of the gross rent as the tax. These agents can be verified via the agent checker on iTax.
5. Value Added Tax (VAT)
Value Added Tax is charged on the supply of taxable goods or services made or provided in Kenya and on the importation of taxable goods or services into Kenya.
While companies & partnerships can voluntarily register for VAT they MUST register if their annual revenue exceeds Kshs. 500, 000.
To facilitate compliance, KRA appoints agents to withhold and pay, VAT on supplies made. These agents can be verified via the agent checker on iTax.
6. Excise Duty
The indirect charge administered on the sale of certain goods such as cigarettes or beer is the excise tax. Each of the 47 county governments administers taxes.
Products and services charged are:
- Excisable goods produced by licensed manufacturers in Kenya
- Excisable services by authorized service providers in Kenya
- Excisable goods brought into the country (imports)
Each of the 47 county governments administers taxes.
The List and types of Excisable goods and services are listed in the 5th Schedule as read together with Section 117 (1) (d) of the Customs and Excise Act, CAP 472 Laws of Kenya. They include;
Mineral water, Juices, soft drinks, cosmetics and Preparations for use on hair, other beer made from malt, Opaque beer, mobile cellular phone services, fees charged for money transfer among others.
7. Capital Gains Tax (CGT)
This is a form of income tax which is charged on a net gain that a business makes after a sale of land or building.
8. Agency Revenue
This is a type of payment that KRA collects on behalf of various revenue collection agencies in Kenya.
The two types of Agency Revenue include;
9. Stamp Duty
Stamp duty is a tax charged on transfer of properties, shares, and stock.
It is collected by the Ministry of Lands, which has seconded the function to Kenya Revenue Authority (KRA).
10. Betting and Pool Tax
This is a tax charged on winnings from betting, gaming and lottery activities.
Betting, gaming, and lottery businesses are required to withhold tax and pay to KRA, a percentage of the winnings being paid out to winners.
So how does the government spend taxes in Kenya?
1. Redistribution of Income
Kenya has a progressive tax structure whereas income increases one pays a high percentage of taxes. Since high-income earners pay slightly more than the low earners, taxation enables the redistribution of incomes in the economy.
2. Controlling Externalities
An externality refers to a byproduct or consequence of activity (commercial or industrial) felt by a third party like pollution.
In a bid to discourage negative externalities such as noise pollution, governments can impose a tax.
3. Revenue generation
By taxing citizens, the government can generate money that can be spent to improve the lives of the citizens or to cater for any other government expenditure.
Some areas where the government uses taxes include the provision of social welfare and infrastructure development.
4. Finance Debts
A fraction of the revenues generated go to financing the debts accrued by the government.
5. Representation
The people choose the government to represent them to ensure responsible management of their taxes.
6. Repricing
Taxation can help reprice goods and services deemed to be incorrectly priced such as alcohol, and tobacco.
KRA Contact Address
Times Tower Building
Haile Selassie Avenue
P. O. Box 48240 – 00100
Tel +254 20 281 0000
Email: callcentre@kra.go.ke
