How filing tax returns is beneficial to the taxpayer

By MUNGAI KIHANYA

The Sunday Nation

Nairobi,

06 July 2025

This week, the Kenya Revenue Authority (KRA) extended the deadline for filing tax returns by five days (from 30th June to 5th July) because the online system (iTax) couldn’t cope with the large number of requests in the final hours. It crashed!

This is the first time in history that the deadline has been extended and I was not happy about the extension! You see, filing of tax returns opens at midnight on 1st January every year and runs for 180 days (six full months) until 11:59:59pm on 30th June. Furthermore, since our tax filing system if fully, 100 per cent computerized, it runs day and night – 24 hours per day, seven days per week.

Why do people wait until the afternoon of 30th June to start logging into iTax?

Still, when I posted my displeasure on the X platform, one Stephen Wambua replied by asking: “…why can't the employed just send their P9s to the tax man they sort themselves out?”. Well, this is exactly what the tax return process does: you get you P9 (summary of PAYE taxes paid during the previous year) from the employer, check that it is correct and upload it to the KRA portal.

Perhaps what Stephen had intended to say was, “…why can't the employer (not employed) just send their P9s to the tax man…”. On the surface, it sounds reasonable. However, as explained in this column in 2009, this can be to your disadvantage in two ways.

First, if you have an unscrupulous employer, they can declare that they pay you more than the actual amount there by increasing their operating costs and saving on their income tax. I have actually encountered a case where a company declared it had employed my brother yet he has never been employed in Kenya in his life! He only discovered this when he was filing his tax return.

The second way you can lose is if you got a pay rise during the year or you lost your job and didn’t get another one immediately. Because of the way that monthly PAYE is calculated, there is a very high chance that, one of when these events occur, you get over-taxed and should get a refund.

When I lost my job in late 2004, the over taxation amounted to more than Sh30,000 and KRA refunded this money to me about six months from the day I filed the tax return.