About 953,971 taxpayers failed to file their tax returns with the Kenya Revenue Authority by the June 30 deadline, exposing them to penalties from the tax authority.
Official data from South Korea’s tax service shows that 8,046,029 taxpayers filed their tax returns by the end of June, against a target of nine million.
This number is about 1.7 million more than the number of people who filed their tax returns as of June 30, 2023.
Failure to meet the deadline for filing a tax return will result in a penalty of Sh2,000 or five percent of an individual’s tax bill, whichever is higher.
Companies pay a penalty of 10,000 shillings or five percent of the tax due in the year the return is filed or whichever is higher.
“About 8,046,029 taxpayers filed their returns by the June 30 deadline,” the IRS said in an online update on its social media pages on Friday.
The Kenya Revenue Authority said in its June 27 report that it was processing more than 100,000 files per day just days before the deadline. Daily numbers are known to rise every year as the deadline approaches.
To enable more taxpayers to file their tax returns, the Tax Authority has extended the working hours at all service centers across the country, and selected Huduma and Contact Centers to assist taxpayers in filing their tax returns within the timelines.
Filing of tax returns has emerged as one of the preferred methods for tax officials to catch tax evaders and grow income tax sectors amid struggles to meet 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 regard 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.
The Kenya Revenue Authority has recorded the highest deficit in tax collection from employees in the first nine months of the current financial year ending June 30, despite the introduction of two tax bands targeting high earners.
A quarterly report released by the National Treasury showed that the Kenya Revenue Authority missed its Payment According to Income (PAYE) target by Sh72.3 billion in the period to March this year.
The tax authority had targeted to collect Sh463.3 billion from salaries in the period ending March, but it collected only Sh390.96 billion, meaning it missed its target by 15.6 percent, the highest deficit 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 bracket of 32.5 percent on monthly income between Sh500,000 and Sh800,000, and 35 percent on income above Sh800,000.
