The Kenya Revenue Authority has confirmed that the Nil return filing option on iTax is back, following the completion of internal system upgrades designed to strengthen tax compliance as the country prepares for the 2025 income tax return period.
KRA said the restored option will only apply to income tax returns covering the January to December 2025 period, which will be filed after March 31, 2026. The authority explained that the delay allows newly installed validation checks within the iTax system to take full effect before taxpayers begin filing.
In a statement from its Business Strategy, Technology and Enterprise Modernisation Department, KRA said the change does not interfere with filing for earlier years or with other tax obligations that remain active.
“The Nil Filing Return option has been reinstated after the necessary system validations were embedded for the 2025 returns to be filed after March 31, 2026,” KRA said.
“Filing for 2024 income tax returns and prior periods, and other monthly obligations such as PAYE [Pay As You Earn], excise duty, MRI [Monthly Rental Income], TOT [Turnover Tax] and others can proceed as before.”
The option had been disabled in January, a move that raised concern among individual taxpayers and small traders, particularly those reporting no income while their financial activity was already visible to KRA through third-party sources.
According to the authority, the restriction formed part of a wider effort to address misuse of Nil filings, especially cases where taxpayers earning income subject to withholding tax continued to submit zero returns.
In an interview with Business Daily, Commissioner for Micro and Small Taxpayers George Obell said the authority’s systems had flagged extensive misuse.
He said 392,162 taxpayers who had tax deducted from their income in 2025 still went on to file Nil returns for the 2024 income year.
“When we check the system, we can see that these taxpayers still had transactions in 2024, yet they filed Nil returns,” Obell said.
He explained that a common misunderstanding among taxpayers is the belief that withholding tax, charged at 5.0 per cent for management or professional fees and 3.0 per cent for contractual fees, clears their tax responsibility.
“That is not correct. It is an advance tax,” he said.
Obell said the authority’s plan to prepopulate income tax returns using third-party information would limit chances of income being left out.
“This time, when we say we are prepopulating returns, that income will already have been captured by the time the taxpayer is seeing the return, and one will not be able to avoid it. Because we already have visibility of the 5.0 per cent, we know what the total income is,” he said.
He added that taxpayers who see income reflected in their returns are expected to engage KRA, warning that failure to do so could lead to broader checks.
“We will also communicate to taxpayers who choose, despite having been shown income on their prepopulated returns, not to come forward and engage the authority. That in itself will be an invitation to look not just at 2025 but also preceding years,” Obell said.
KRA has also advised taxpayers to review their Personal Identification Numbers on iTax to ensure their details are correct, noting that the system now relies heavily on combined data from multiple channels.
The authority said this increased visibility has been strengthened by the rollout of the electronic Tax Invoice Management System, which captures transaction details across the economy and links buyers, sellers and transaction values.
The return of Nil filing coincides with the rollout of KRA’s Income and Expenditure Verification programme, which took effect on January 1, 2026. The programme uses data drawn from eTIMS invoices, withholding tax certificates and import records to cross-check what taxpayers declare.
Earlier in January, Deputy Commissioner Patience Njau said KRA was shifting focus towards turning Nil filers, non-filers and zero payers into compliant taxpayers.
“This year, our focus will be very different as we aim to convert the Nil and non-filers and zero payers into paying taxpayers,” Njau said, explaining why Nil filings for 2025 returns had initially been restricted.
