The Kenya Revenue Authority (KRA) plays a central role in Kenya's economy, collecting taxes, managing customs operations and enforcing tax laws on behalf of the national government. Its responsibilities affect employees, employers, business owners, landlords, importers, exporters and individuals earning income in different ways.
From registering for a KRA PIN and filing annual income tax returns to understanding electronic invoicing, tax refunds and disputes, there are several important details about the Authority that every Kenyan should understand.
Here are 15 important facts about KRA, its responsibilities, tax systems and services.
1. KRA Was Established on 1 July 1995
The Kenya Revenue Authority was established on 1 July 1995 under the Kenya Revenue Authority Act, Chapter 469 of the Laws of Kenya.
Before its establishment, different government departments were responsible for administering various revenue collection functions. KRA was created to bring these responsibilities under one authority and improve the administration and collection of government revenue.
Its establishment gave Kenya a central institution responsible for assessing, collecting and accounting for revenue under the country's tax laws.
KRA operates under the National Treasury and is headquartered at Times Tower in Nairobi's Central Business District.
Official source: KRA – About Us.
2. KRA Does More Than Collect Income Tax
Many Kenyans associate KRA primarily with income tax, but its responsibilities extend to several other areas of taxation and revenue administration.
The Authority administers different tax categories, including:
- Income Tax: Tax imposed on taxable income earned by individuals and businesses.
- Pay As You Earn (PAYE): Tax deducted from employment income.
- Value Added Tax (VAT): Tax charged on taxable goods and services.
- Excise Duty: Tax imposed on specified goods and services.
- Withholding Tax: Tax deducted at source from specified payments.
- Turnover Tax: A tax regime applicable to qualifying businesses.
- Monthly Rental Income Tax: Tax applicable to qualifying residential rental income.
- Customs Duties: Duties and taxes administered on imported goods under applicable customs laws.
KRA also administers revenue-related charges and facilitates trade through customs operations.
This means that someone who does not have a conventional salaried job may still have tax obligations administered by KRA.
Official source: KRA – Types of Taxes.
3. A KRA PIN Is Not the Same as Being Tax-Compliant
A Personal Identification Number (PIN) is a unique identifier issued by KRA to taxpayers and other persons who require registration for tax purposes.
Individuals use their PIN when interacting with KRA and undertaking certain transactions that require tax identification.
A KRA PIN may be required when:
- Opening certain financial accounts.
- Registering a business.
- Purchasing or transferring property.
- Registering a motor vehicle.
- Applying for certain government services.
- Undertaking transactions that require tax registration.
However, having a PIN does not automatically mean that someone is tax-compliant.
Tax compliance depends on fulfilling the applicable obligations attached to the PIN. These may include filing returns, paying taxes when due and meeting other statutory requirements.
A person can therefore have a valid KRA PIN and still have outstanding returns or unpaid tax liabilities.
Official source: KRA – PIN Registration.
4. Most Registered Individuals Must File Annual Income Tax Returns
One of the most important responsibilities for individuals registered with KRA is filing annual income tax returns.
For resident individuals, the income tax return generally covers income earned during the previous calendar year, from 1 January to 31 December.
For example, the 2025 individual income tax return covers the 2025 year of income.
The normal filing deadline is 30 June of the following year. This means the 2025 individual return was due by 30 June 2026.
The requirement also applies to individuals whose income tax payable is zero, where they have an active income tax obligation and qualify to file a nil return.
Employees whose employers have already deducted PAYE are not automatically exempt from filing their annual returns.
Returns are submitted through KRA's iTax platform.
Official source: KRA – Filing and Paying Taxes.
5. Employees Pay PAYE, but They Still Have to File Returns
Pay As You Earn (PAYE) is the system through which employers deduct income tax from employees' salaries and remit it to KRA.
The tax applies to employment income, including salaries, wages, bonuses, commissions, allowances and other qualifying employment payments.
Employers are responsible for:
- Calculating the PAYE payable by employees.
- Deducting the applicable tax from salaries.
- Filing monthly PAYE returns.
- Remitting the deducted tax to KRA.
The deadline for employers to file PAYE returns and remit the tax is the 9th day of the following month.
However, PAYE deductions do not eliminate an employee's responsibility to file an annual individual income tax return. An employee must still declare their employment income through the annual return, using the information provided by their employer.
For employees with more than one employer during a year, income from all employers must be included in the annual return.
Official sources: KRA – PAYE | KRA – 2025 Income Tax Returns.
6. Income From Side Hustles and Online Work May Also Be Taxable
Having a salaried job does not mean that additional income is automatically exempt from taxation.
Kenyans earning money through consultancy, freelancing, online work, businesses and other income-generating activities may have additional income tax obligations.
For example, an employee earning a monthly salary who also operates an online business may need to declare both employment and business income in their annual tax return.
The applicable tax treatment depends on the nature of the income and the relevant provisions of the Income Tax Act.
KRA's 2025 income tax filing guidance specifically identifies side hustles, online work and consultancy as additional income sources that taxpayers should declare.
This is particularly relevant as more Kenyans participate in digital work, independent contracting and small-scale businesses.
Official source: KRA – Filing 2025 Income Tax Returns.
7. eTIMS Is Not Only for VAT-Registered Businesses
The Electronic Tax Invoice Management System (eTIMS) is KRA's electronic invoicing solution.
It allows businesses to generate and transmit electronic tax invoices through approved systems and devices, including computers, smartphones and tablets.
An important detail is that eTIMS is not restricted to businesses registered for Value Added Tax.
KRA requires persons engaged in business to onboard eTIMS and issue electronic tax invoices. This includes companies, partnerships, sole proprietorships and businesses operating in the informal sector.
The requirement also covers businesses that are not VAT-registered, including those supplying exempt goods and services.
KRA provides eTIMS software free of charge through its available solutions. Businesses choosing to integrate their own invoicing systems through third-party providers may, however, incur integration costs.
There is also a provision for buyer-initiated invoicing when purchases are made from qualifying small businesses whose annual turnover does not exceed KSh 5 million.
Another important development concerns income tax returns. KRA announced that its special allowance for declaring valid business expenses without supporting eTIMS/TIMS invoices applied to the 2025 year of income. From the 2026 year of income, declared income and expenses must be supported by valid electronic tax invoices generated and transmitted through eTIMS/TIMS, subject to applicable legal provisions.
Official sources: KRA – What Is eTIMS? | KRA – 2025 Income Tax Returns Notice.
8. Businesses Must Understand the VAT Registration Threshold
Value Added Tax is an indirect tax charged on taxable goods and services supplied in Kenya and taxable imports.
Businesses supplying taxable goods and services must understand when they become legally required to register for VAT.
According to KRA, registration is compulsory for a person whose annual taxable supplies reach or are expected to reach KSh 5 million.
Businesses below this threshold may also apply for voluntary VAT registration, subject to the applicable conditions.
VAT-registered businesses have several responsibilities, including:
- Charging VAT on applicable taxable supplies.
- Maintaining proper sales and purchase records.
- Issuing electronic tax invoices.
- Filing monthly VAT returns.
- Remitting VAT payable to KRA.
The monthly VAT return and payment deadline is the 20th day of the following month.
For example, VAT obligations for October 2026 are due by 20 November 2026.
Official sources: KRA – Value Added Tax | KRA – Tax Obligations.
9. Rental Income Is Also Subject to Tax
Owning rental property in Kenya can create income tax obligations, whether the property is an apartment, house or other qualifying residential property.
KRA administers a simplified tax arrangement known as Monthly Rental Income (MRI), which applies to qualifying residential rental income.
The applicable regime depends on factors including the type of property, the landlord's residence status and the amount of rental income earned.
Commercial rental income is treated differently and is generally accounted for under the applicable annual income tax provisions.
KRA's published guidance identifies the following distinctions:
- Residential rental income may qualify for the monthly rental income tax regime.
- Commercial rental income is subject to the applicable annual income tax treatment.
- Residential rental income above the prescribed MRI threshold falls outside that simplified regime.
- Non-resident landlords are not covered by the resident MRI regime.
KRA's published MRI guidance states that qualifying residential rental income is taxed at 7.5% of gross rent, effective from 1 January 2024. The applicable threshold and treatment should be checked against the current legislation when determining a landlord's liability.
Official source: KRA – Residential Rental Income.
10. Different Taxes Have Different Filing Deadlines
Not all KRA tax obligations share the same filing and payment deadline.
Some returns are filed annually, while others must be submitted every month.
The important deadlines include:
- Individual income tax - 30 June of the following year
- PAYE - 9th of the following month
- VAT - 20th of the following month
- Turnover Tax - 20th of the following month
- Monthly Rental Income Tax - 20th of the following month
- Excise Duty - Generally 20th of the following month, subject to specific exceptions
These deadlines are important for individuals, employers and businesses because missing them may result in penalties and interest.
For example, an employer who deducts PAYE from employees' salaries must remit the money within the prescribed period rather than holding it until the end of the financial year.
Official source: KRA – Service Charter, April 2026.
11. A Tax Compliance Certificate Is Valid for 12 Months
A Tax Compliance Certificate (TCC), also known as a tax clearance certificate, is an official document issued by KRA confirming a taxpayer's compliance status.
It is commonly required in several situations, including:
- Applying for government tenders.
- Applying for certain employment opportunities.
- Renewing work permits.
- Applying for specific business licenses.
- Obtaining licenses for clearing and forwarding activities.
According to KRA, a Tax Compliance Certificate is valid for 12 months.
However, receiving a certificate requires more than simply having a KRA PIN.
Applicants must meet the applicable compliance requirements, including filing the required returns, paying taxes when due and clearing outstanding tax liabilities.
KRA has also enhanced its TCC application process to incorporate eTIMS/TIMS compliance for non-individual entities and individuals earning income outside employment.
Applications are made through iTax, and taxpayers can use KRA's verification services to check certificate validity.
Official source: KRA – Tax Compliance Certificate.
12. You Can Access Several KRA Services Without Visiting a KRA Office
KRA has developed digital platforms that allow taxpayers to access services remotely.
One of its principal platforms is iTax, which supports activities such as:
- Applying for and managing tax registration details.
- Filing individual and business tax returns.
- Making tax payment registrations.
- Applying for tax compliance certificates.
- Checking tax information and obligations.
- Submitting tax refund applications.
KRA also provides the M-Service mobile application, which offers services such as PIN registration, filing nil returns, applying for TCCs, filing and paying selected taxes, and verifying payment details.
The availability of these platforms means that many routine tax transactions can be completed without physically visiting a KRA office.
Official sources: KRA – iTax | KRA – M-Services.
13. KRA Tax Payments Use an Official Government Payment Channel
Kenyans can pay taxes through designated payment channels after generating a payment registration number (PRN) or electronic payment slip through the relevant KRA system.
For mobile money payments, KRA announced the use of the Government's unified PayBill number:
222222
OFFICIAL GOVERNMENT PAYBILL NUMBER
The payment process involves:
- Generating a payment slip through the relevant KRA platform.
- Selecting the mobile money payment option.
- Entering PayBill number 222222.
- Using the PRN or reference number on the payment slip as the account number.
- Entering the exact amount payable and confirming the transaction.
KRA also accepts payments through appointed partner banks and other approved channels.
The PRN is important because it identifies the specific payment being made.
KRA's official notice on the unified payment system was issued on 17 November 2023.
Official sources: KRA – Tax Payment Through PayBill 222222 | KRA – M-PESA Tax Payments.
14. Taxpayers Can Claim Refunds When They Have Overpaid Tax
KRA does not only collect taxes. It also administers refunds when taxpayers have paid more tax than they owe or have made qualifying erroneous payments.
An income tax refund may arise from several situations, including:
- An employer deducting more PAYE than the employee's actual tax liability.
- Excess instalment tax payments.
- Excess withholding tax credits.
- Qualifying tax reliefs and deductions.
- Tax paid in error.
For example, an employee whose employer deducts more PAYE than the employee's final tax liability may qualify for an income tax refund, provided the overpayment is established and the relevant conditions are met.
Refund applications are submitted through iTax, where taxpayers provide the necessary details and supporting documents.
Under Section 47 of the Tax Procedures Act, an income tax refund claim must generally be made within five years from the date the tax was paid.
KRA may audit a refund application to establish whether the claim is valid. Its published guidance provides for communicating a decision within 90 days of receiving an application.
Official sources: KRA – Tax Refunds | Tax Procedures Act, 2015.
15. You Have the Right to Dispute a KRA Tax Decision
A taxpayer who disagrees with a tax assessment or another appealable decision made by KRA has legal channels through which to challenge that decision.
Under Section 51 of the Tax Procedures Act, a taxpayer disputing a tax decision can lodge a written notice of objection with the Commissioner within 30 days of being notified of the decision.
The objection must satisfy the legal requirements for a valid objection, including clearly stating the grounds of disagreement and providing the relevant supporting information.
The process generally involves:
- Receiving the tax decision from KRA.
- Reviewing the assessment and identifying the disputed issues.
- Preparing and submitting a notice of objection within the prescribed period.
- Providing supporting documents and explanations.
- Receiving KRA's objection decision.
If the taxpayer remains dissatisfied, the decision may be appealed to the Tax Appeals Tribunal, subject to the applicable legal requirements.
Kenya also provides for Alternative Dispute Resolution (ADR), which allows eligible tax disputes to be resolved through discussions and agreement between KRA and taxpayers without necessarily proceeding through lengthy litigation.
KRA identifies 120 days as the statutory ADR timeline under Section 55 of the Tax Procedures Act.
These provisions establish that taxpayers have formal legal rights when dealing with disputed tax assessments.
Official sources: KRA – Service of Objection Notices | KRA – Alternative Dispute Resolution | Tax Procedures Act, 2015.
Additional Context: KRA Also Manages Customs and Border Revenue
Beyond domestic taxation, KRA has responsibilities in customs administration and border control.
Through its Customs and Border Control Department, the Authority administers customs procedures relating to imported and exported goods, collects applicable import duties and taxes, and facilitates legitimate international trade.
This means that KRA's responsibilities extend to importers, exporters, clearing and forwarding agents, manufacturers and businesses involved in cross-border trade.
For individuals importing goods into Kenya, customs procedures may involve import declarations and applicable duties and taxes depending on the goods, their classification, customs value and relevant exemptions.
KRA also participates in the administration of customs procedures within the East African Community framework.
Its customs responsibilities make it an important institution in Kenya's international trade system, beyond its familiar role in collecting income tax.
