Almost every large penalty balance we clean up started as a nil return nobody filed. Understanding which deadline falls when, and assigning one person to own it, removes most of the risk.
The monthly compliance calendar
Diarise these dates and treat them as fixed. Where a due date falls on a weekend or public holiday, file early rather than late.
- 9th — PAYE, NITA and housing levy remittances for the previous month
- 9th — NSSF contributions
- 9th — SHIF (SHA) contributions
- 20th — VAT return and payment for the previous month
- 20th — withholding VAT and withholding tax remittances
- 30 June — individual income tax return for the previous year
What the penalties actually cost
Late individual income tax returns attract the higher of a fixed penalty or a percentage of the tax due; for companies the fixed amount is considerably larger. Late VAT and PAYE carry their own penalties, and unpaid tax accrues interest every month until settled.
Because interest compounds on a growing balance, a small unpaid amount from three years ago is rarely small today.
Cleaning up an existing balance
Start by downloading the full iTax ledger rather than relying on a summary. Separate principal tax from penalties and interest, since they are treated differently: principal generally has to be paid or arranged in instalments, while penalties and interest can be the subject of a waiver application.
Where cash flow is tight, a payment plan agreed with the station is far better than silence, which escalates to agency notices on your bank account.
Preventing a repeat
Name one internal owner for filings, put every deadline in a shared calendar with a three-day reminder, and reconcile the iTax ledger quarterly so a misallocated payment is caught within weeks instead of years.
Frequently asked questions
- Can KRA penalties be waived?
- Penalties and interest can be waived on application where there is a reasonable explanation. Principal tax is generally not waived, but instalment arrangements are possible.
- Do I still file if the business made no money?
- Yes. A nil return is still a return, and failing to file one attracts the same late-filing penalty as any other year.