KRA Restores “Nil Return” Filing with Upgraded iTax to Boost Compliance for 2025 Returns

The Kenya Revenue Authority (KRA) has reinstated the option for taxpayers to file ‘Nil Returns’ after a temporary suspension that affected individuals and small businesses.

The suspension was necessary to upgrade the iTax system. KRA has now added enhanced validation checks to curb misuse and ensure accurate reporting. The restored feature applies to 2025 income tax returns submitted after March 31, 2026.

Commissioner for Micro and Small Taxpayers George Obell explained that the new system will prepopulate returns using data from eTIMS, withholding tax certificates, and import records. “Returns will now show all recorded income automatically. Taxpayers cannot avoid it,” he said.

The upgrade follows discoveries of widespread errors and abuse. Thousands of taxpayers had filed nil returns despite having taxes withheld. Many treated withholding tax as a final payment instead of an advance.

Under the new system, taxpayers must review preloaded data in iTax. They can accept it or contact KRA to correct mistakes. Failure to engage may trigger audits for the current and prior tax years.

Deputy Commissioner Patience Njau said the goal is to convert non-filers, zero-income filers, and those misusing nil returns into compliant taxpayers. “We are using technology to ensure fairness and transparency,” she added.

KRA emphasized that other obligations remain unchanged. Filing for previous years, PAYE, excise, Monthly Rental Income, and Turnover Tax continues as usual. Taxpayers are advised to verify their Personal Identification Numbers (PINs) for accuracy.

The authority believes technology can make tax reporting easier for honest taxpayers while deterring deliberate misreporting. The prepopulated system will save time and reduce errors, creating a more efficient filing process.

This initiative is part of a broader compliance push that gives KRA better visibility into income flows. By modernizing tax administration, the authority aims to expand the tax base, improve accountability, and support Kenya’s economy.

The restored nil filing option signals a new era of digital tax management, balancing convenience for compliant taxpayers with strict measures against abuse.