KRA has reinstated nil returns filing on iTax following a temporary suspension. The suspension was a calculated system upgrade designed to transition the tax environment into an era of automated data verification.
Key Takeaway: The ‘Nil Return’ option is no longer an automatic right; it is now a conditional privilege granted only after passing a digital filtration process.
Defining the Valid ‘Nil’ Filer
Nil Returns are exclusively for individuals or entities with zero taxable income during FY 2025.
- Students (No income generation);
- Unemployed Persons (Out of workforce); and
- Dormant Businesses (No commercial activity)
If you earned income-regardless of amount-you do not belong in this category.
When filing a nil return and the taxpayer selects the nil return option, the iTax system will scan any linked data sources and if no data is found, it will allow for nil filing but if there is transactions found, the nil filing is blocked and the taxpayer is forced to file a full declaration.
For example, if a taxpayer files a nil return but eTIMS reflects KES 1.2M in invoices issued during FY 2025. The system will block nil filing and requires full income declaration.
What KRA uses to get Taxpayer Data
- eTIMS Invoices;
- Withholding Tax Records;
- Employer Records; and
- Customs Declarations
Section 59 1(A)of the Tax Procedures Act empowers the commissioner to require a taxpayer to integrate the electronic tax system for the purposes of submission of electronic documents including detailed transactional data in the prescribed form.
Risks for false filings
- Tax audits;
- Penalties of KES 2,000 for individuals and KES 20,000 or 5% of tax due, whichever higher for companies;
- System triggered compliance reviews;
- PIN auto flagging;
- Difficulty obtaining Tax Compliance Certificates; and
- Audit selection through risk scoring.
Remember the deadline for filing your 2025 tax returns is 30th June 2026.
Compliance is no longer about filing but about data consistency.
Reach out to Intelpoint Consulting for tax advisory and consultancy.
+254 714 348 150
info@intelpointconsulting.com