Tax compliance in Kenya has more moving parts than most business owners realise. This checklist covers every obligation from PAYE to VAT to corporate tax.
Running a tax-compliant business in Kenya requires managing several different obligations simultaneously. A business that files income tax but forgets PAYE — or pays VAT but doesn't file returns — is still non-compliant and subject to penalties. Here's what you need to stay current.
Failure to remit PAYE on time attracts a 25% penalty on the outstanding amount plus interest.
VAT refunds (where your input VAT exceeds output VAT) are claimable but slow — budget for the timing difference.
Your TCC confirms all returns are filed and balances paid. You need it for government tenders, many private contracts, and some bank facilities. It's valid 12 months and re-applied for on iTax when it expires.
1. Not filing nil returns when there's no activity — nil returns are still required 2. Missing PAYE remittance deadlines — the 25% penalty stacks up fast 3. Not registering for VAT when turnover crosses KSh 5M 4. Forgetting instalment tax payments — these are due quarterly, not just at year-end 5. Treating withholding tax as optional — KRA audits specifically look for unpaid withholding on consultant payments
KRA conducts both routine and risk-based audits. Being audited is not necessarily a sign you've done something wrong — but having clean, well-documented records makes the process straightforward. A good accounting system and properly filed returns give you the documentation an audit requires.
Mycrea builds financial dashboards and business management tools for Kenyan companies — including systems that track tax obligations and flag upcoming filing deadlines.
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