How to File Nil Returns for the First Time in Kenya

How to File Nil Returns for the First Time in Kenya
Filing your tax returns for the first time can seem like a daunting task, especially if you're not familiar with tax terminologies and procedures. However, the process is simpler than you might think, particularly if you're filing a nil return. A nil return is a type of tax return that you file when you have not earned any income in a financial year. As a student, unemployed person, or if you simply didn't have any taxable income, this guide will walk you through how to file nil returns for the first time (KRA Source).


Understanding Nil Returns




Before we dive into the step-by-step process, it's crucial to understand what a nil return is. If you are a Kenyan resident and have a Kenya Revenue Authority (KRA) Personal Identification Number (PIN), you are required to file an annual tax return. If you did not earn any income during the year, you are still obligated to communicate this to KRA by filing a nil return.

Filing a nil return is a legal requirement and a sign of tax compliance. It's a way of informing KRA that you didn't have any taxable income during a specific period.

Read Also: How to file nil Returns for Students


Step-by-Step Guide: Filing Nil Returns for the First Time




Step 1: Preparation


The first step in filing nil returns is preparation. You'll need your KRA PIN and iTax password. If you're a first-time taxpayer, you might have recently acquired your KRA PIN. Your KRA PIN is a unique personal identifier that KRA uses to track your tax transactions. Your iTax password, on the other hand, is what you use to access your iTax account.


Step 2: Access the iTax System


Once you have your KRA PIN and password ready, visit the KRA iTax portal. Enter your KRA PIN, click on 'Continue', and then enter your password and the arithmetic sum of the security stamp. Once you've entered these details correctly, you'll be able to log into your iTax account.


Step 3: Navigate to Returns


After logging into your account, navigate to the 'Returns' tab on the menu. A drop-down menu will appear. Select 'File Nil Return.'


Step 4: Filing the Nil Return


After clicking 'File Nil Return,' a new page will open. You'll be required to select the 'Tax Obligation' (choose 'Income Tax – Resident Individual') and enter the return period (this is usually the previous financial year). Once you've filled in this information, click 'Submit.'


Step 5: Download the Receipt


After submitting the nil return, a pop-up message will appear, confirming that your nil return has been submitted successfully. An acknowledgment receipt (e-Receipt) will be generated. Download this receipt and keep it safe, as it serves as evidence of your tax compliance.

Read Also: Penalty for not Filing Nil Returns in Kenya


Conclusion




Filing your nil returns is an easy process that plays a significant role in maintaining your tax compliance. It's a small step, but it is indeed a leap in your journey towards financial responsibility. Remember, every step counts, no matter how small it may seem. So go ahead, file your nil return, and step confidently into the world of tax compliance.


FAQs




What is a Nil Return?


A nil return is a tax return filed by a taxpayer who has no taxable income to report for a given tax period. Despite not having any taxable income, KRA requires taxpayers to file these returns to maintain their tax compliance status.


What are the penalties for not filing a nil return?


The penalty for not filing a nil return was KES 20,000. It's essential to file your nil return on time to avoid such penalties and maintain your tax compliance.


What do I need to file a nil return for the first time?


To file a nil return for the first time, you'll need your KRA PIN and your iTax password. With these, you can log into your iTax account, navigate to the 'Returns' section, and select 'File Nil Return.' After providing the necessary details and submitting, you'll receive an acknowledgment receipt as evidence of your submission.
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