The
Kenya Revenue Authority has introduced a series of system upgrades aimed at
improving the efficiency, accuracy, and convenience of tax compliance for
taxpayers and tax practitioners alike.
Key
highlights include:
- New Legacy Adjustment
Workflow
- Launch of Web-based Excise
and Turnover Tax Returns
- CSV upload functionality
for Advance Tax declarations
- Expanded use of Refund and
Overpayment Vouchers
- Resolution of bugs
affecting input VAT claims, excise returns filing, eTIMS invoices, and
ledger entries for betting companies
- Pilot program for
simplified PAYE return filing targeting MSMEs
A)
iTax System Enhancements
1.
Legacy Adjustment Workflow
- Enables correction of
migrated legacy ledger balances.
- Allows generation of
Legacy Vouchers where applicable.
- Taxpayers advised to
liaise with TSOs for guidance.
2.
Web-based Excise Return for Excisable Services
- Simplified online filing
for excisable service providers like telecoms, betting, and financial
services.
- Available under a new
‘Simplified Returns’ menu on the taxpayer portal.
- Excisable goods still use
the auto-populated Excel return.
3.
Web-based Turnover Tax (TOT) Return
- Easier return filing for
Micro and Small Taxpayers (MST).
- Accessible via 'Simplified
Returns' on iTax and M-Service app.
- Also available on the KRA
USSD platform.
4.
CSV for Advance Tax
- New CSV upload feature for
commercial vehicle Advance Tax payment slips.
- Beneficial for taxpayers
with multiple commercial vehicles.
5.
Refund/Overpayment Voucher Utilisation
- Enhanced payment options
for Withholding VAT, Income Tax, and Rent.
- New Excel template field
for capturing OAV/RAV amounts.
- System processes
transactions on a FIFO (First-In, First-Out) basis.
B)
Resolution of System Bugs/Defects
1.
VAT Input Claims Error
- Fixed issue where input
VAT claims were blocked due to supplier PIN inactivity on invoice date.
2.
Excise Return Filing Blockage
- Resolved inability to file
returns due to greyed-out credit carried forward sections.
3.
eTIMS Invoicing for Branches
- Corrected issue of
overstated invoices in branch transactions.
4.
Betting Companies Ledger Entries
- Fixed issue with payment remittances
showing in future tax periods.
C)
Pilot Program for Simplified PAYE Return Filing
In
April 2025, the Kenya Revenue Authority announced a pilot program aimed at
simplifying the Pay As You Earn (PAYE) return filing process, particularly
benefiting Micro, Small, and Medium Enterprises (MSMEs). The current PAYE
system has been identified as complex and burdensome, often discouraging
compliance among small businesses.
Key
features of the simplified PAYE return system include:
- Multiple filing options: Employers will have
access to various platforms for filing returns, including:
- An Excel-based return
for offline preparation.
- A mobile application
facilitating on-the-go submissions.
- A web-based platform
accessible through the KRA portal.
- API integration for seamless
connectivity with existing payroll systems.
These
enhancements aim to make the PAYE filing process more user-friendly and
accessible, thereby improving compliance rates among employers.
KRA is
actively engaging stakeholders to gather feedback and ensure the new system
meets the needs of all users. Employers are encouraged to participate in these
engagements and provide insights to help refine the system further.
Additional
Insights
Noteworthy
Trends in Tax Administration
- Increased Digitalization: Enhanced digital tax
return filing tools tailored for micro-enterprises and excisable services.
- Flexible Payment Options: More avenues for
taxpayers to settle dues via voucher adjustments.
- System Responsiveness: Regular issue
resolutions reflecting a commitment to improving taxpayer experience.
Practical
Tips for Taxpayers
- Always confirm your
supplier’s VAT registration status on iTax before claiming input tax.
- Keep track of advance tax
obligations especially for fleets, and use the new CSV tool for bulk
uploads.
- Utilize the 'Simplified
Returns' portal options for excise and turnover tax to avoid system
downtimes or form errors.
- Regularly reconcile PRNs
and ledger balances to detect misallocations early.
