About three million Kenyans have not filed their tax returns four days before the June 30 deadline, exposing them to penalties from the Kenya Revenue Authority.
KRA data shows that about six million people filed their returns by June 26 against nine million active taxpayers in its database.
The number of six million represents a 20 percent increase compared to the same period last year.
Failure to meet the deadline for filing a tax return is an offense punishable by a fine of Sh2,000 or five percent of an individual’s tax bill, whichever is higher. Companies pay a penalty of Sh10,000 or five per cent of the tax payable in the year in which the return is made or whichever is higher.
“Six million taxpayers have filed their returns by June 26. All taxpayers whose accounting period ends in December are required to file their returns by June 30 every year,” the taxpayer said in a statement on Thursday.
The authority said on Thursday that it processes more than 100,000 files daily. The daily numbers are known to rise annually as the deadline approaches.
To allow more taxpayers to file their returns within the timelines, the Tax Officer has extended his working hours at all service centres across the country and some Hudoma centres.
Filing returns has emerged as one of the preferred methods of tax officials to net tax evasion and grow income tax sectors amid struggles to achieve collection targets.
The law requires anyone with a KRA PIN to file returns regardless of their employment status.
Tax officials have failed to meet revenue targets in recent years with respect to tax defaulters and a small tax base that does not include the majority of the self-employed and those working in the informal sector.
KRA recorded the highest deficit in tax collection from employees in the first nine months of the current fiscal year ending June 30, despite introducing two tax bands targeting higher earners.
A quarterly report published by the National Treasury showed that the Kenya Revenue Authority failed to meet its Pay As You Earn (PAYE) target by Sh72.3 billion in the period to March this year.
The tax collector had a target of collecting Sh463.3 billion in salaries in the period ending March, but collected only Sh390.96 billion, meaning he missed his target by 15.6 percent, the highest shortfall according to available data.
In the 2023 Finance Act, the Income Tax Act was amended to introduce two individual tax brackets.
The law introduced a new tax band of 32.5 percent for monthly income between Sh500,000 and Sh800,000 and 35 percent for income above Sh800,000.