What You Should Know About KRA Offences and Penalties

Running a business or paying taxes in Kenya means following the rules set by KRA. If you slip even accidentally you can face penalties or extra charges. Understanding these penalties helps you avoid unnecessary costs and stay compliant.
Why This Matters
When it comes to taxes I did not know does not protect you. Late filings missing returns wrong deductions or delayed payments all count as offences. KRA is strict about enforcing penalties and the charges pile up quickly.
Common Offences and What They Cost
Late filing of PAYE returns twenty five percent of the tax due or ten thousand shillings whichever is higher.
Late payment of PAYE tax five percent of the tax due plus one percent interest per month.
Failure to deduct or remit withholding taxes ten percent of the tax amount involved.
Late payment of withholding tax five percent of the tax due.
Late VAT return filing five percent of the tax due or ten thousand shillings whichever is higher.
Late VAT payment five percent penalty plus one percent monthly interest.
Late filing of company or partnership income tax returns five percent of the tax due or twenty thousand shillings whichever is higher.
Late payment of income tax for non individuals five percent of the tax due plus applicable interest.
Offences related to KRA PIN registration a fixed fine such as two thousand shillings depending on the violation.
What This Means for Businesses and Individuals
If you are not consistent with filings and payments penalties grow fast. Delays or missing returns cost money and repeated offences can trigger audits and bigger compliance issues.
How to Stay Safe and Compliant
Keep clear records for all transactions invoices payroll and deductions use reminders or automated systems track filing dates ensure withholding tax is deducted and remitted properly treat KRA compliance as a core function and seek professional support when needed.
How FaidiHR Can Help
FaidiHR helps businesses stay compliant by managing payroll deductions statutory payments and tax deadlines. We ensure PAYE withholding VAT and other returns are handled accurately and on time reducing errors penalties and audit stress.
Final Word
KRA penalties are serious and can disrupt cash flow and operations. Staying compliant is always cheaper and easier than dealing with penalties. FaidiHR provides smooth accurate and stress free compliance support.
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