KRA Targets Nil Tax Returns Filers as New Compliance Crackdown Takes Effect

The Kenya Revenue Authority is sending alerts to taxpayers who filed nil tax returns but recorded income activity, warning them to update their filings or face consequences.

The Kenya Revenue Authority (KRA) has launched a targeted compliance drive against taxpayers who filed nil tax returns but whose financial records indicate they earned income during the year. The authority is cross-referencing filing data with electronic records to identify mismatches and is notifying affected taxpayers directly.

KRA Flags Nil Tax Returns With Income Activity

In messages circulating on social media and verified by Kenyans.co.ke, KRA is alerting taxpayers who submitted nil income tax returns for 2024 but whose records show income earned in 2025. The authority is using employer-submitted payroll data and records from the Electronic Tax Invoice Management System (eTIMS) to detect discrepancies between what taxpayers declare and what their financial activity shows.

“Dear XXXX, our records indicate that while you filed a Nil Income Tax Return for 2024, you earned income in 2025 as evidenced by your eTIMS transmissions,” read one of the messages sent to affected taxpayers.

KRA confirmed to Kenyans.co.ke that the alerts are being generated automatically when a taxpayer’s income records fail to match their most recently filed return. Where the authority identifies such a mismatch, it flags the account and generates a pre-populated 2025 income tax return for the taxpayer to review and submit.

The messages further direct taxpayers to log in to the iTax portal to file their returns and settle any outstanding tax liability. Those requiring assistance are advised to call KRA’s helpline at 0711 099 999.

How the Matching System Works

According to KRA, the crackdown relies on data from two primary sources. Employer-submitted records allow the authority to identify individuals who received employment income, while eTIMS transmissions capture business transactions linked to a taxpayer’s Personal Identification Number (PIN). When either source indicates income activity against a nil tax return filing, the system raises a flag.

This approach allows KRA to move beyond self-reported declarations and instead use third-party data to verify compliance, making it significantly harder for taxpayers to under-report or omit income from their returns.

Part of a Broader Compliance Push

The crackdown on nil tax returns is part of a wider enforcement strategy that KRA announced in late 2025. In a notice dated November 10, 2025, the authority warned that beginning January 1, 2026, it would begin validating income and expenses declared in both individual and non-individual income tax returns against electronic records.

“KRA wishes to inform taxpayers, stakeholders and the public that, effective January 1, 2026, it will begin validating income and expenses declared in both individual and non-individual income tax returns,” the authority stated in the notice.

Under the new rules, all declared income and expenses must be supported by a valid electronic tax invoice, correctly transmitted with the buyer’s PIN where applicable, subject to exceptions provided under Section 23A of the Tax Procedures Act.

The move is part of KRA’s broader agenda to improve tax compliance, close revenue gaps, and modernize enforcement using digital tools. Taxpayers who filed nil tax returns but have since recorded income activity are urged to act promptly by logging into the iTax portal, reviewing their pre-populated returns, and paying any tax due to avoid penalties.