DEADLINE FOR FILING KRA RETURNS

  • Every individual with a PIN has been required to file their income tax returns for every year of income. For this year the deadline will be June 30, 2021. This is a statutory requirement that if not met will attract penalties. Filing of returns also helps you to ascertain that what was deducted from your income as tax by your employer was remitted to KRA.
  • January 1st, 2021 marked the beginning of the tax return filing season for the 2020 year of income. All annual tax returns for the year 2020 for individuals and for entities with a December year-end should be submitted online through the iTax platform on or before 30th June 2021. The iTax portal can be accessed through https://itax.kra.go.ke. KRA encourages taxpayers to file their returns early in order to avoid the end of June deadline rush.
  • Individual Income Tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.

Tax Measures and Changes Effective 1st January 2021

  • The Act amends the Income Tax Act and the Value Added Tax (VAT) Act of Kenya.
  • The key amendments made through the Act include the reinstatement of:
  • the resident corporate income tax rate to 30% from 25%; and
  • (ii) the highest individual income tax band to 30% from the 25%. Additionally, the VAT rate was reinstated to 16% from 14% through a legal notice in accordance with the law. These rate changes became effective on 1 January 2021.
  • Some of the notable introductions into the tax landscape is the minimum tax at the rate of 1% of the gross turnover and a digital services tax at the rate of 1.5% of the transaction value.
  • Kenya has introduced tax on digital services from two fronts; an income tax front and VAT front.
  • Also, the introduction of a Voluntary Tax Disclosure Program, which will run for a period of three years beginning 1 January 2021, provides the opportunity for organizations to rectify any past gaps in tax declarations and payments.

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