Understanding the 2025 Tax Season

The tax filing season in Kenya is a crucial annual responsibility for individuals and institutions. For the 2025 cycle, the Kenya Revenue Authority (KRA) has maintained the long-standing deadline of June 30. This applies to all persons holding a valid Personal Identification Number (PIN), including employees, business owners, landlords, and even those without income—who are expected to file Nil Returns.

Filing tax returns in a timely manner is not just a legal obligation; it also helps avoid fines, penalties, and unnecessary interest charges. The penalties for non-compliance can be steep, and KRA has automated its compliance systems to track and enforce these obligations strictly.

The Filing Deadline: June 30, 2025

All individual and corporate taxpayers must submit their 2024 income tax returns on or before June 30, 2025. This includes:

• -Employees filing under the Income Tax – Resident Individual category.

• -Business owners and consultants using the Self-Assessment system.

• -Individuals with no income filing a Nil Return.

KRA has made online filing mandatory through the iTax portal. Failure to file by the deadline will automatically trigger penalties, regardless of whether one has tax payable or not.

Who Must File a Tax Return?

• -Salaried employees (including those whose taxes are deducted via PAYE).

• -Self-employed individuals in business, trade, or consultancy.

• -Landlords earning rental income.

• -Persons earning income from outside Kenya.

• -Students or unemployed individuals holding a KRA PIN (must file Nil Returns).

It is important to note that holding a KRA PIN, regardless of employment status, comes with the responsibility to file an annual return.

Penalties for Late Filing

The penalties for missing the June 30 deadline are applied automatically by the iTax system. They include:

• -For Individuals: A fixed penalty of Ksh 2,000 or 5% of the tax due—whichever is higher.

• -For Companies and Partnerships: A minimum of Ksh 20,000 or 5% of the tax liability—whichever is greater.

These penalties are charged once the deadline lapses and will appear under the taxpayer’s ledger as an outstanding liability until paid.

Penalties for Late Payment of Tax

In cases where tax is filed but not paid on time:

• -A 5% penalty is applied on the unpaid amount.

• -Additionally, interest accrues at 1% per month (or part thereof) until the full tax is paid.

This interest is compounding, and the longer the delay, the more expensive it becomes to clear the debt.

Monthly Obligations: PAYE and Installment Taxes

Beyond the annual returns, some taxpayers have monthly and quarterly obligations:

• -Employers must submit PAYE returns by the 9th of every month.

• -Businesses under installment tax schedules must remit tax in specified portions across the financial year.

Non-compliance on these monthly submissions also attracts interest and penalties.

Tax Amnesty Opportunity

Taxpayers with outstanding penalties and interest accrued up to December 31, 2023, have a rare chance to regularize their affairs through a tax amnesty running until June 30, 2025. Those who clear the principal tax due within this window may have associated interest and penalties waived.

This amnesty provides a valuable relief window, particularly for individuals and SMEs who have struggled with historical tax burdens.

What Happens If You Don’t File?

• -Your KRA account will be flagged as non-compliant.

• -You may be unable to apply for or renew key documents like tax compliance certificates, business permits, and government tenders.

• -Enforcement measures, including debt recovery and account freezes, may be initiated by KRA.

• -Repeated failure to file returns could result in legal action or audits.

Conclusion

Timely tax filing is a personal and corporate duty that cannot be ignored. With the deadline for 2024 income tax returns set at June 30, 2025, taxpayers are encouraged to file early, pay any due amounts promptly, and take advantage of the available amnesty where applicable. Non-compliance is not only financially costly but could disrupt essential personal and business processes tied to tax clearance.