The Kenya Revenue Authority (KRA) has reinstated the ‘Nil Returns’ function on its digital portal, ending a brief suspension designed to weed out tax evaders.
The restoration of the service on Monday, February 9, comes just two weeks after the taxman disabled the feature as part of a strategic move to scrutinise taxpayers who claim to have no income while potentially engaging in taxable transactions.
This reinstatement follows a period where the authority confirmed that the temporary freeze allowed for a comprehensive validation process.
During this time, the KRA cross-referenced portal data with other financial pipelines, including eTIMS, withholding tax records, and customs entries to ensure accuracy.
According to a statement from the tax collector, the Nil Filing return option has been reinstated after the necessary system validations have been embedded for the 2025 returns to be filed after March 31, 2026.
Consequently, taxpayers intending to file nil returns for the January to December 2025 period will be able to do so once the official filing window opens after the March deadline.
Meanwhile, the authority clarified that standard operations remain unaffected for earlier periods, noting that filing for 2024 income tax returns and prior periods, and other monthly obligations like PAYE (pay-as-you-earn), excise, MRI (monthly rental income), and TOT (turnover tax), can proceed as before.
The initial decision to suspend the option in late January was prompted by growing concerns that a significant number of Kenyans were filing nil returns despite earning taxable income.
Speaking in an interview last month, Deputy Commissioner Patience Njau explained that the intervention was necessary to spread the tax burden more evenly and capture those earning from sectors such as rental income who may be bypassing the system.
Data revealed by Ms. Njau highlights a significant gap in tax compliance, pointing out that of the 22 million registered individuals with KRA PINs, only 8 million are considered active taxpayers, and a mere 4 million consistently meet their tax obligations.
Furthermore, the KRA has warned that it is becoming increasingly difficult for non-compliant citizens to hide as the authority leverages integrated technology to monitor various income streams in real-time.
Ms. Njau emphasized that this year, the focus will be very different as they aim to convert nil filers and non-filers into paying taxpayers. She noted that the authority now has systems in place to monitor transactions such as withholding tax, income earned, eTIMs, and customs.
To mitigate the risks of missing out on that section, the KRA maintained that they would not be filing nil returns until the validation was done, meaning that between now and March 30, taxpayers cannot file their 2025 income tax return.
With the June tax filing deadline approaching, the authority expects the reinstated system to provide a more accurate reflection of the country’s tax base.