KRA Reinstates Nil Returns Filing After System Validation Exercise

The Kenya Revenue Authority has restored the nil returns filing option on its iTax platform following the completion of a comprehensive system validation process, the taxman announced this week.

The reinstatement comes approximately two weeks after KRA suspended the feature as part of efforts to broaden the tax base by converting nil filers and non-filers into active taxpayers. Verification by this publication on Monday confirmed that the option is now accessible on the KRA portal.

According to KRA, taxpayers who qualify as nil-filers will be able to use the restored function to submit their 2025 income tax returns covering the January to December period, with filings opening after March 31, 2026.

“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,” the authority stated in an official communication.

The revenue collector added that filing for 2024 income tax returns, prior tax periods, and monthly obligations including Pay-As-You-Earn (PAYE), excise duty, Monthly Rental Income (MRI), and Turnover Tax (TOT) will continue without interruption.

Addressing Tax Compliance Gaps

The temporary suspension was implemented amid growing concerns over widespread filing of nil returns by Kenyans earning taxable income—a practice that undermines tax compliance and limits revenue collection.

During the suspension period, KRA conducted extensive scrutiny of various transaction records, including income taxes, withholding taxes, electronic Tax Invoice Management System (eTIMS) data, and customs documentation to identify individuals operating outside the tax net.

Deputy Commissioner Patience Njau, speaking in late January, explained that the measure was designed to distribute the tax burden more equitably and capture taxpayers in sectors such as rental income who have remained outside the formal tax system.

Ms. Njau revealed stark statistics highlighting the compliance challenge: of the 22 million individuals registered with KRA Personal Identification Numbers (PINs), only 8 million actively remit taxes. Of these, a mere 4 million consistently fulfill their tax obligations—a gap that significantly constrains government revenue mobilization.

“This year, our focus will be very different as we aim to convert the nil and non-filers and zero payers into paying taxpayers,” Ms. Njau stated. “We have systems in place to monitor other transactions, such as withholding tax, income earned, eTIMs, and customs, among others.”

She emphasized that the validation exercise was necessary to prevent revenue leakage from taxpayers who declare nil income despite evidence of taxable transactions in other KRA systems.

The restoration of the nil returns option signals the completion of KRA’s initial validation phase while maintaining enhanced monitoring mechanisms designed to improve tax compliance ahead of the June filing deadline.