The Kenya Revenue Authority (KRA) has issued a warning to businesses filing nil returns that they may face consequences in the future, even as the filing deadline approaches.

Taking to their official X account on March 30, 2026, KRA stressed that anyone with a business cannot declare nil returns.

“A message to habitual NIL filers: The truth is, if you get income from your business, you cannot declare NIL returns,” KRA wrote.

KRA further warned that nil filing is not a growth strategy and that businesses should comply with the law and file their income taxes by the June 30 deadline this year.

NIL return is not growth strategy

The authority noted that filing a nil return for a business is not a business growth strategy because it formally declares zero income, directly contradicting business expansion.

“A NIL return is not a growth strategy. If you have income, file TODAY!”,” KRA warned.

Taxpayers with an active KRA PIN who fail to file returns by June 30 risk facing penalties, including fines of Ksh2,000 or Ksh20,000, or 5 per cent tax due.

Moreover, fraudulent declarations can lead to penalties of up to 25 per cent of the tax involved plus a 1 per cent monthly interest on unpaid tax. In extreme cases, false declarations can lead to criminal prosecution, jail terms of up to 10 years, or fines of up to Ksh10 million.

The authority on March 2026 reveals that the country has over 22 million registered taxpayers, yet only around 7 million actively pay taxes. The majority of these are formal-sector employees who contribute through the Pay As You Earn (PAYE) system.

Of the active taxpayers, approximately 3.2 million are formally employed and with registered businesses, while the remainder comprises self-employed individuals and firms.

SMS to taxpayers

The Kenya Revenue Authority (KRA) began sending SMS messages to individuals and companies, informing them that its systems detected income linked to their PINs.

The messages notify recipients that their 2025 income tax returns have already been prepopulated on the iTax portal and are ready for review and submission.

Reports show that KRA flagged more than 392,000 taxpayers in this category. Internal reviews identified 392,162 companies and individuals who declared zero income in 2024 despite records showing financial activity.

In many cases, the activity appeared through withholding tax records or transactions transmitted through the Electronic Tax Invoice Management System (eTIMS).

“Records indicate that while you filed a Nil Income Tax Return for 2024, you earned income in 2025 as evidenced by your eTIMS transmissions. Consequently, your pre-populated 2025 Income Tax Return is ready for filing. Please log in to iTax to file your return and pay any tax due.”