It’s that time of the year again. You need to file your taxes, but you are discouraged by the confusing and tedious process. Further, you can’t seem to find a simple guide on the almighty interwebs. Worry no more, TechAdvisor, to your rescue. This post will explain in layman’s language how anyone can file their taxes.
Note: This is a guide for filing Income Tax Returns for Employment Income Only.
Why should I file my taxes?
The first reason is that it’s a legal requirement for anyone with a KRA PIN, and late filing attracts a penalty of five percent of the tax due or Ksh.2000, whichever is higher, for individuals.
If you don’t, you run the risk of getting your PIN suspended, which is terrible news. You need a KRA Pin to register title deeds, motor vehicles, underwriting insurance policies, and importation of goods, to name but a few.
Third, the returns improve the accountability of your employers. Your employer deducts part of your income to the Pay As You Earn (PAYE) system. Filing your returns enables KRA to reconcile what you have declared and what your employee submitted.
Open a browser and navigate to itax.
Log in with your KRA PIN and password. If you cannot remember your password, you can always use the Forgot password option.
Once logged in, navigate to Returns > File Returns. Select Income Tax-Resident Individual as the tax obligation and enter the return period. It usually refers to the period from January to December of the previous year.
Download the Income Tax Resident Individual form. It is usually an archived document, and you will need to unzip it. If you do not have any software that can do this, you can download WinRAR, a popular archiving tool.
Open the document. It has several tabs which you can navigate between from the bottom. Be sure to read the Read Me tab on how to enable Macros. It will be necessary for the last step that involves validation
The first tab you need to fill in is A_Basic_Info and is pretty straightforward. Ideally, you only need to fill in Part 1 of that Section. You will only need to fill in Part 2 if you have a tax refund. We will explain this further in the final section.
It is often easier to file your returns separately if you are married, and I wouldn’t advise declaring your spouse’s income on the same form.
The next tab, F_Employment_Income, requires a P9 form from your employer, and we will cover how to fill it in the next post.