What happened

The Kenya Revenue Authority (KRA) has announced that for the 2026 tax year it will prepare draft tax returns for every registered taxpayer before the filing season opens. Taxpayers will receive their pre‑filled return and will have only two months to verify the information, make any necessary adjustments, and submit the final return. The announcement was communicated through a LinkedIn post by KRA, signalling a move toward greater automation and a tighter filing window. This is the first time the agency has set a two‑month review period for a full‑year return cycle.

Context and background

KRA has been progressively digitising its tax administration processes since the launch of the iTax platform in 2014. Over the past few years the authority has introduced pre‑population of returns for certain categories of taxpayers, such as large corporates and payroll‑based employees, using data from third‑party submissions and customs records. The latest decision expands that practice to all taxpayers for the 2026 year, reflecting both the maturity of the data‑matching systems and a policy push to reduce manual filing errors.

The move follows a pilot programme carried out in the 2025 tax year where a limited group of small and medium enterprises (SMEs) received draft returns generated from their sales, purchase and payroll data. Feedback from the pilot indicated that early access to a draft helped businesses spot discrepancies sooner, but also highlighted concerns about the short review window. In response, KRA consulted with the Kenya Association of Manufacturers (KAM) and the Kenya Private Sector Alliance (KEPSA) before finalising the two‑month timeline.

Legally, the change is anchored in the Income Tax Act, which permits the tax authority to issue assessment notices based on information it holds. By issuing a draft rather than a final assessment, KRA retains the taxpayer’s right to dispute or amend the figures within the prescribed period. The two‑month window aligns with the agency’s internal processing schedule, allowing it to close the 2026 filing season by the end of the fiscal year and begin revenue forecasting earlier.

Compared with what is normal

Historically, Kenyan taxpayers have received a reminder to file their returns in the months of June to September for the preceding tax year, with the official deadline falling on 30 September. The filing window typically spans four to six months, giving businesses ample time to gather records, engage accountants and lodge returns. The new two‑month review period therefore represents a significant contraction of the usual timeline.

• Usual filing period: June – September (≈4 months)
• New review period for 2026 drafts: two months from receipt of draft
• Previous pre‑fill pilots allowed up to three months for adjustments

Seasonally, many SMEs in Kenya experience peak sales during the long rains (March‑May) and the festive period (November‑December). The shortened window may clash with these busy periods, especially for businesses that rely on cash flow from later sales to settle tax liabilities.

Why it matters

For SME owners, the two‑month window compresses the time available to reconcile bank statements, inventory logs and payroll records against the figures KRA has auto‑populated. Missing the deadline could result in penalties, interest charges or a forced assessment based solely on the draft data. Larger corporations, which already have sophisticated accounting systems, may benefit from the early visibility of their tax position, allowing them to plan cash management and dividend distribution more accurately.

Individuals and sole proprietors, who often file manually, may find the accelerated schedule challenging if they lack integrated accounting software. The change also raises the stakes for tax advisors, who will need to adjust their service delivery calendars to accommodate an earlier review phase. From a macro perspective, KRA expects the initiative to improve compliance rates, reduce the incidence of under‑reported income, and provide the government with a clearer picture of revenue streams earlier in the fiscal year.

Practical steps

• Check your iTax account regularly for the draft return notification as soon as it appears.
• Gather all supporting documents – bank statements, sales invoices, payroll registers – and compare them with the figures shown in the draft.
• If discrepancies are found, use the iTax portal to amend the return within the two‑month window; keep a log of changes for future reference.
• Consider engaging a qualified tax practitioner early in the review period to avoid last‑minute rush and to ensure all allowable deductions are captured.
• Set internal reminders for the deadline date and communicate the timeline to finance staff to avoid missed submissions.

Tax Planning & Compliance services at Beavoren Ventures can help you navigate the new two‑month review process, ensuring your draft return is accurate and that you meet the deadline without penalties.

Need help with compliance? Email info@beavorenventures.co.ke or call +254 716 296 857.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.