The Kenya Revenue Authority (KRA) has intensified its enforcement efforts by going after Kenyans filing nil returns despite having income.
The latest crackdown follows the KRA’s reinstatement of the filing of nil returns, which had been suspended to ensure tax compliance in the country.
eTIMS Exposes Undeclared Earnings
Through eTIMS, KRA has identified undeclared transaction earnings from individuals.
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In a message sent to a user believed to have evaded tax, KRA revealed via eTIMS that transactions were recorded in 2025 despite filing nil returns for 2024.
“Dear (USER), Our records indicate that while you filed a Nil Income Tax Return for 2024, you earned income in 2025 as evidenced by your eTIMS transmissions,” read the message.
The authority has also advised the individual to log in to the iTax portal, file the pre-populated 2025 tax return, and pay any pending tax due.
“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,” stated KRA.
KRA’S Special Table for Tax Compliance Enforcement
Earlier on, KRA rolled out new digital enforcement measures targeting persistent non-filers and businesses engaged in fraudulent practices.
Starting January 2026, the authority introduced a “Special Table” system that restricts certain taxpayers from submitting returns until they regularize their records.
It primarily affects persistent nil filers, entities that have failed to file VAT returns for six months or more, traders who have not adopted e-TIMS, and operators engaged in schemes such as claiming fictitious input tax.
“KRA is using real-time data from electronic invoices and customs records to identify non-compliant PINs,” said KRA Deputy Commissioner in charge of Taxpayer Experience, Patience Njau.
The deadline for businesses to adopt eTIMS and resolve outstanding compliance issues is March 31, 2026. Entities that fail to regularize risk deregistration or penalties.
Genuine nil filers remain legally permitted to submit returns once the validation exercise is complete and may need to provide supporting documents, such as invoices or bank statements, to reactivate their VAT accounts and obtain a Tax Compliance Certificate.
Officials said the initiative reflects a broader shift toward data-driven enforcement, aimed at distinguishing between inadvertent non-compliance and deliberate tax evasion. More than 100,000 entities are currently at risk of deregistration for VAT non-compliance, the authority said.
The authority urged all taxpayers to verify their filing status and ensure compliance well ahead of the March deadline.
Also Read: Explained: Why KRA Cannot Tax Bank Deposits.
KRA Reinstates Nil Return Filing for 2025 Cycle After Suspension
On February 7th, 2025, KRA restored the nil tax return filing option after completing system validations aimed at strengthening tax compliance ahead of the 2025 income tax return cycle.
Earlier, the KRA introduced a temporary block on nil return filings in January as part of compliance and data validation checks.
Filing of the 2025 nil tax cycle will run until June 30, 2026. Individuals with no taxable income, as the law requires, are subject to a statutory penalty of Ksh2,000.
The temporary suspension was meant to prevent revenue loss while the authority reviews taxpayer records.
According to the KRA’s Business Strategy, Technology and Enterprise Modernization Department, the nil return option now applies to the January-December 2025 tax period in the iTax system.
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