Filing your KRA (Kenya Revenue Authority) tax returns on time is not just a responsibility—it’s a legal requirement. Whether you're an individual, a business owner, or an employer managing payroll, delays in filing can result in hefty penalties that affect your financial health and compliance record.
What Are KRA Returns?
KRA returns are declarations submitted to the Kenya Revenue Authority that detail your income, business revenue, or PAYE (Pay As You Earn) obligations. They are typically filed annually (for individual taxpayers) or monthly (for businesses and employers managing payroll taxes).
Consequences of Late Filing
Failing to file your tax returns on time comes with financial consequences, including:
1. Individual Taxpayers (iTax)
If you are a registered taxpayer and fail to file your returns by 30th June, you are liable to pay a penalty of:
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KES 2,000 per year (for individuals).
2. Companies and Partnerships
For businesses, the penalty for late returns is higher:
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KES 20,000 or 5% of the tax due (whichever is higher).
3. Late Payment Interest
In addition to penalties, any tax that remains unpaid will attract an interest of 1% per month on the unpaid amount.
4. PAYE (Employers)
Employers must file PAYE returns by the 9th of the following month. Failure to do so results in:
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A penalty of KES 10,000 or 25% of the tax due (whichever is higher).
Avoiding Penalties Through Automation
Manual tax calculations and late submissions often result from human error and lack of reminder systems. Modern HR and payroll software like FaidiHR can help businesses:
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Automate payroll tax calculations.
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Generate KRA-compliant reports.
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Set alerts for return deadlines.
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File on time, every time.
Don’t let avoidable penalties dent your profits or reputation. Let technology do the heavy lifting so you can stay compliant and focus on growth.
Stay Compliant. Stay Stress-Free.
Talk to us today and simplify your payroll compliance.
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Email: sales@faidihr.com