KRA Notice Before the August 20 Deadline: Who Got It and What To Do

KRA issues notices to select taxpayers ahead of the August 20 deadline

The Kenya Revenue Authority (KRA) dispatched compliance notices to a batch of registered taxpayers on August 17, warning that the statutory filing deadline of August 20 is imminent. The letters list firms that have either omitted or only partially filed the returns required by law and spell out the actions needed to avoid a surcharge.

Key dates and obligations

The Kenyan tax calendar sets a series of recurring filing deadlines that apply to all registered entities:

• PAYE, NSSF, SHIF and Affordable Housing Levy (AHL): payable by the 9th of the following month through iTax; late deductions attract interest and penalties.
• VAT returns: due by the 20th of the following month, with any net tax payable on the same day. Input VAT must be supported by valid tax invoices and an eTIMS record.
• Withholding tax (WHT): remittance for management fees, professional fees, rent, dividends and interest, generally due by the 20th of the following month.
• Turnover Tax (TOT): 3 % of gross income for businesses whose annual turnover falls between KES 1 million and KES 25 million, payable monthly or quarterly.
• Residential Rental Income Tax (RRIT): 7.5 % on gross rent for residential properties earning KES 15 000–KES 4 million per month, payable each quarter.
• Corporate income tax: provisional instalment tax due on the 20th of the 4th, 6th, 9th and 12th months of the accounting year; final self‑assessment due on the 20th of the sixth month after year‑end for limited companies.

Taxpayers should verify each filing window against the current iTax dashboard and any recent Finance Act amendments.

How this cycle differs from previous years

While the 9th‑day PAYE deadline and the 20th‑day VAT deadline have stayed the same for a decade, recent policy tweaks have altered rates and compliance mechanics. NSSF contributions are now tiered, SHIF sits at 2.75 % of gross pay and the Affordable Housing Levy is set at 1.5 % of salary, matched by a 1.5 % employer contribution. The eTIMS platform now rejects paper‑only invoices for VAT input claims.

KRA has also begun cross‑matching WHT payments with bank and M‑Pesa transaction data. When the system spots a gap between reported WHT and typical industry ratios, it may generate a pre‑filled assessment, raising the chance of an audit.

What recipients should do

Anyone who received a notice should log into iTax, examine the specific compliance gaps flagged, and lodge any outstanding returns before the August 20 cut‑off. If a penalty is listed, the amount can be settled through the same portal. Firms unsure about the required documentation are advised to consult their tax adviser or contact KRA’s help desk.

Tax Planning & Compliance — what this means for your books

Now for the business angle Beavoren cares about. A compliance shift is a leading indicator of penalty risk, input-VAT recoverability and cashflow timing — not just a filing date.

• Penalty and interest exposure. Late PAYE/VAT draws 25% penalty plus 1% per month compound interest; recognize a provision under IAS 37 the month a return is late rather than waiting for the demand.
• Input-VAT and eTIMS. Input-VAT claims now need a matched eTIMS invoice; an unrecorded supplier invoice is a recoverable-VAT loss, not a tax footnote — reconcile supplier eTIMS records to your purchase ledger monthly.
• Provisional instalment accuracy. Corporates pay in four instalments; underpaying instalment tax crystalises interest on the shortfall — re-estimate quarterly against actuals, not only at year-end.
• Payroll cost lines. NSSF, SHIF and AHL are employer cost lines that flow through payroll; keep them mapped to expense correctly so the management accounts match the iTax remittance.

Practical steps

• Pin the current year’s iTax filing calendar (9th/20th anchors) for every tax head you remit and set auto-reminders one week ahead.
• Reconcile supplier eTIMS records to your purchase ledger monthly so every input-VAT claim is defensible at the next KRA audit.
• Re-estimate provisional instalment tax each quarter against actual year-to-date profit, not only on last year’s figure.
• Recognize a late-filing penalty provision in the month a return is late rather than at year-end.
• Confirm NSSF tier, SHIF 2.75%, AHL 1.5% and any PAYE band change in your payroll software before the next run.
• Alert your accountant the week a Finance Act update drops, not the week a filing rejects.

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.