Running a business in Kenya comes with responsibilities—including staying compliant with the Kenya Revenue Authority (KRA). Filing your taxes correctly and on time is key to avoiding penalties, qualifying for tenders, and running a transparent, trusted enterprise.
This guide breaks down everything you need to know about filing taxes as a business owner in Kenya in 2025—from registration to deadlines and new changes—all in simple terms.
1. First Things First: Register with KRA
Before anything else, you need a KRA PIN. Whether you're a sole proprietor, partnership, or company, this is your business tax ID.
Did you know? All PIN holders must file a return every year—even if you made zero income. That means nil returns are mandatory.
If your business expects to earn KES 5 million or more annually, you also need to register for VAT. Businesses earning between KES 1 million and KES 50 million must register for Turnover Tax (TOT).
2. Main Types of Taxes for Business Owners
Here’s a breakdown of the major taxes you need to be aware of and their deadlines:
Corporate Income Tax (For Companies)
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Return Type: IT2C
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Deadline: Within 6 months after your accounting year ends (e.g., year ends 31st Dec ⇒ file by 30th June)
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Installments: Pay in 4 parts during the year—on the 20th day of the 4th, 6th, 9th, and 12th month
Individual Income Tax (For Sole Proprietors)
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Return Type: IT1
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Deadline: 30th June 2025
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Tip: If you didn’t earn anything—file a Nil Return
PAYE (Pay-As-You-Earn)
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Who Pays: Employers with salaried employees
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Deadline: File and pay by the 9th of the next month
VAT (Value Added Tax)
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Who Pays: Businesses with annual sales of KES 5M and above
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Deadline: File by the 20th of each month
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Update: From Nov 2024, VAT returns are auto-filled on iTax—just confirm and submit
Turnover Tax (TOT)
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Who Pays: Small businesses earning KES 1M–50M per year
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Rate: 1% of gross sales
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Deadline: File and pay by the 20th of every month
3. How to File Taxes on iTax (Step-by-Step)
Filing online through the iTax portal is straightforward. Here’s how:
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Visit itax.kra.go.ke
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Log in using your KRA PIN and password
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Click “File Return” and select the correct return (IT1, IT2C, VAT, TOT, etc.)
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Fill out the form and attach any documents (like financials)
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Submit and download the receipt
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Generate a payment slip if tax is due and pay through your bank or online
4. How to Pay Your Taxes
Once you've filed, payment is simple:
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Use the payment slip from iTax
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Pay via online banking, M-PESA, or at a KRA-appointed bank branch
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Installments can be made if your tax liability exceeds KES 40,000
5. Avoiding Penalties: File On Time
Late filing or payment leads to hefty fines. Even nil returns must be submitted on time.
But here’s some good news:
Tax Amnesty (Until 30th June 2025):
KRA is offering relief on penalties and interest for debts owed up to 31st December 2023.
Don’t miss this opportunity to clear your books.
6. What’s New in 2025?
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VAT returns are now pre-filled on iTax (from Nov 2024)
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The Finance Bill 2025 proposes new changes to income tax, VAT, and more—stay updated
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Resident companies are now taxed on worldwide income, not just Kenyan revenue
7. Pro Tips for Smooth Filing
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Keep clear financial records
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Use software like FaidiHR to generate automated PAYE and P9 reports
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Engage a licensed tax advisor if your business is growing or has complex needs
Make Tax Compliance Easy with FaidiHR
Need help automating your payroll and tax filing? FaidiHR is your one-stop solution for small and medium businesses in Kenya. Our system generates compliant PAYE reports, automates employee records, and ensures you're always ready for tax season.
Email: sales@faidihr.com
Phone: +(254) 702 339 699
Let us help you take the stress out of tax season—get in touch today!