You focus on running your business while FedhaTrac helps keep your books and tax filings on track.

Reliable KRA tax filing depends on reliable bookkeeping because the figures reported ultimately come from the business’s underlying financial records.

Imagine being asked:

What were your business expenses last year?

You cannot answer that reliably by looking at today’s bank balance.

You need records.

Those records might include:

1. Sales invoices
2. Customer payments
3. Supplier invoices
4. Business expenses
5. Bank transactions
6. M-Pesa transactions
7. Assets and liabilities
8. Reconciled bookkeeping
9. Financial information
10. Tax computation and return

This is the connection businesses often miss.

Tax filing sits at the end of the financial-record process.

If the underlying bookkeeping is wrong, the tax information prepared from it can also be wrong.

Which KRA Tax Returns Might a Kenyan SME Need?

There isn’t one answer for every business, but common obligations include:

Your actual obligations should be confirmed from your KRA registration and circumstances.

That is an important part of tax compliance: know what your business is registered for before thinking about how to file it.

Corporation Tax Returns in Kenya

For companies, corporation tax is one of the most important annual KRA tax returns.

KRA states that resident companies are generally taxed at a corporation-tax rate of 30%, although incentives, exemptions and special regimes can change the treatment for qualifying entities.

Preparing the accounts early makes KRA tax filing considerably easier and gives the business time to investigate discrepancies before deadlines approach.

When Is the Corporation Tax Return Due?

Corporation tax is filed online through iTax using the Income Tax Company Return.

KRA states that the return is due within six months after the end of the company’s accounting period. Therefore, a company with a 31 December year-end ordinarily has until 30 June of the following year to file its company income-tax return.

But there is an important distinction between filing and paying.

KRA’s filing-deadline guidance indicates that the balance of corporation tax is due by the 30th day of the fourth month following the end of the accounting period.

For a typical December year-end, that means the payment timeline can arrive before the filing deadline.

This is precisely why tax planning should not begin in June.

What Information Is Needed for a Company Tax Return?

Before preparing the return, the underlying accounting records should be complete.

Depending on the company, this may include:

• Sales records
• Expense records
• Bank reconciliations
• M-Pesa reconciliations
• Accounts receivable
• Accounts payable
• Asset records
• Loan information
• Withholding-tax certificates
• Applicable tax adjustments
• Supporting invoices
• eTIMS records
• Financial statements

The exact tax computation can differ from accounting profit because tax rules determine which amounts are taxable or deductible.

That is one reason bookkeeping and tax preparation should not be confused.

Bookkeeping creates the financial records.

Accounting organises and interprets them.

Tax preparation applies the relevant tax rules to determine the return.

Turnover Tax Returns in Kenya

Turnover Tax, commonly called TOT, is another tax regime Kenyan small businesses frequently search for.

KRA’s current main TOT guidance says the regime applies to eligible resident persons or corporates whose gross or expected turnover is more than KSh 1 million but does not exceed KSh 25 million in a year of income. It currently states a rate of 1.5% of gross sales, effective from 1 July 2023.

Important: Some older KRA FAQ pages still surface outdated turnover thresholds and rates in search results. For example, an older FAQ currently indexed by KRA gives a different threshold and rate. For this reason, always verify TOT rules against KRA’s current tax page or obtain professional advice before relying on an older search result.

That is exactly the kind of issue that makes authoritative, current tax research important.

When Is Turnover Tax Due?

KRA’s current TOT page states that the return and payment are due on or before the 20th day of the month following the end of the tax period.

A caution when researching TOT online

Some older KRA pages remain indexed and show previous TOT thresholds and rates. For example, an older KRA FAQ currently visible in search gives a KSh 50 million upper threshold and 1% rate, while KRA’s current dedicated TOT page gives KSh 25 million and 1.5%.

That is exactly why tax articles and business decisions should use current official guidance rather than relying on an old Google result.

Check the latest Turnover Tax requirements directly with KRA before relying on older online information.

Businesses should also remember that being within a turnover-tax regime does not automatically answer every other tax question.

For example, VAT registration has separate requirements.

VAT Returns in Kenya

VAT is another major monthly tax obligation.

KRA currently states that the general VAT rate is 16%, while qualifying zero-rated supplies are taxed at 0%. Exempt supplies are treated differently and generally do not give rise to deductible input tax.

When Is a VAT Return Due?

KRA states:

VAT returns and payment are due on or before the 20th day of the following month.

That makes bookkeeping timing extremely important.

A VAT-registered business cannot reasonably wait until year-end to organise its sales and purchases.

It needs a monthly process.

Why Bookkeeping Matters for VAT

VAT preparation can require information about:

• Sales
• Purchases
• Tax invoices
• Credit notes
• Input VAT
• Output VAT
• eTIMS records
• Applicable adjustments

If supplier documentation is missing or sales records do not agree with the books, VAT preparation becomes more difficult.

This is another reason to maintain financial records throughout the month.

PAYE Returns for Kenyan Employers

PAYE applies where an employer is required to deduct tax from employee remuneration.

KRA currently states that employers should deduct the applicable PAYE and file the PAYE return and remit the tax by the 9th day of the following month.

This means employers need accurate payroll information before the filing deadline.

FedhaTrac does not provide payroll processing, but where clients provide the relevant payroll figures, those amounts can be incorporated appropriately into the bookkeeping and wider accounting records.

That distinction is important when defining the scope of your finance support.

KRA PAYE guidance

Withholding Tax in Kenya

Withholding tax works differently from ordinary annual tax filing.

For certain payments, the payer is responsible for deducting tax at source and remitting it to KRA.

KRA lists examples including certain:

• Management and professional fees
• Training fees
• Contractual fees
• Interest
• Dividends
• Royalties
• Rent
• Marketing and advertising payments
• Other specified payments

The applicable treatment and rate depend on the nature of the payment and the recipient.

KRA states that withholding tax should generally be remitted within five working days after deduction is made. Once remitted, a withholding certificate is generated for the payee through iTax.

For many resident taxpayers, withholding tax is not necessarily the final tax. The income may still need to be declared in the annual return, with the withholding amount claimed as a tax credit where applicable.

Important KRA Tax Filing Deadlines Kenyan SMEs Should Know

Here’s a useful summary of common deadlines:

KRA’s consolidated deadline guidance confirms these broad timelines.

Important change for individual taxpayers from 2027

The Finance Act 2026 changes the filing timeline for individual taxpayers. KRA states that from 1 January 2027, individual taxpayers including self-employed persons and partnerships covered by that change will be required to file income-tax returns by the last day of the fourth month after the end of the year of income, meaning 30 April for calendar-year taxpayers. Companies and other non-individual taxpayers continue with the sixth-month rule.

That is precisely why a static tax calendar copied from an old article is risky.

Do not use a generic table as your only tax calendar.

Your entity type, accounting period, tax obligations and legislative changes can affect your deadlines.

Instead, establish a tax calendar for your business.

What Records Do You Need Before Filing KRA Tax Returns?

This is where good bookkeeping pays for itself.

A business preparing its KRA tax returns may need several categories of records.

Income Records

• Sales invoices
• eTIMS invoices
• Customer receipts
• Bank deposits
• M-Pesa receipts
• Other business income

Expense Records

• Supplier invoices
• eTIMS/TIMS documentation where required
• Receipts
• Bank payment records
• M-Pesa payments
• Expense descriptions
• Other Supporting documents

Financial Records

• Bank statements
• M-Pesa statements
• Bank reconciliations
• Accounts receivable
• Accounts payable
• Asset schedules
• Loan statements
• Financial statements

Tax Records

• Prior returns
• Withholding certificates
• VAT records
• PAYE information where applicable
• Tax payment confirmations
• Relevant KRA correspondence

The precise information required depends on the taxpayer and the return being prepared.

How Long Should Tax Records Be Kept in Kenya?

Record retention deserves more attention than it usually receives. Tax filing does not mean the supporting records can immediately be discarded.

Section 23 of the Tax Procedures Act generally requires taxpayers, subject to the applicable provisions, to retain relevant documents for five years from the end of the reporting period to which they relate. Certain circumstances, such as ongoing proceedings or amended assessments, can extend the practical retention requirement. A KRA Tax Appeals Tribunal decision reproduces and discusses this statutory five-year requirement.

For businesses, that means document management should not end once the return is filed.

A sensible bookkeeping process should make old records retrievable.

eTIMS and KRA Tax Returns: Why 2026 Changes the Conversation

This is now one of the most important sections of this article.

For the 2025 year of income, KRA introduced a transitional arrangement allowing taxpayers to declare valid business expenses that were not supported by eTIMS/TIMS invoices, subject to validation after submission.

However, KRA’s June 2026 public notice states:

From the 2026 year of income onward, declared income and expenses must be supported by valid electronic tax invoices generated and transmitted through eTIMS/TIMS.

That makes invoice discipline and bookkeeping increasingly interconnected.

A business should no longer think:

“We’ll sort the receipts out when we file.”

Instead:

1. Transaction occurs
2. Correct invoice/support obtained
3. Transaction recorded
4. Payment matched
5. Bank/M-Pesa reconciled
6. Records reviewed
7. Tax information prepared

That is tax-ready bookkeeping.

For a full explanation of registration and electronic invoicing, internally link this section to your new Complete eTIMS Guide for Kenyan Businesses & SMEs.

How to Prepare for KRA Tax Filing

A strong tax-filing process can be divided into six stages.

1. Confirm Your KRA Tax Obligations

Before preparing anything, establish what the business is actually registered for.

Do not assume.

2. Bring Your Bookkeeping Up to Date

Ensure the period’s transactions have been entered and categorised.

If several months are missing, you may need catch-up bookkeeping.

If transactions exist but the balances are unreliable, you may need bookkeeping cleanup.

Internally link here to your Bookkeeping Cleanup Benefits article.

3. Reconcile Bank and M-Pesa Accounts

Your financial records should agree with actual financial activity.

Bank reconciliation can identify:

• Missing transactions
• Duplicate entries
• Bank charges
• Incorrect transfers
• Unidentified deposits

Internally link bank reconciliation to the article we just created.

M-Pesa-heavy businesses should also link to the M-Pesa Bookkeeping in Kenya guide.

4. Review Invoices and Expense Documentation

Check that sales and expenses are supported by the appropriate invoices, receipts and eTIMS records.