It is a requirement by law for every individual taxpayer to file their individual annual income returns.
It is founded on two major crucial reasons:
• THE CASE OF A TAXPAYER WITH EMPLOYMENT INCOME ONLY,
Submission of individual annual income tax returns gives the Kenya Revenue Authority (KRA) an opportunity to verify if what the employer declared in his PAYE monthly submissions matches what the taxpayer with employment income has declared for a given year of income.
In case of a disparity between the two declarations, the necessary steps are taken to address the anomaly. This process further serves to enhance accountability and transparency so that we don’t have instances where an employer deducts PAYE from their employee’s incomes but fails to remit the deduction to KRA.
• THE CASE OF A TAXPAYER WITH OTHER SOURCES OF INCOME OTHER THAN EMPLOTMENT INCOME ONLY.
Filing of an individual annual income tax return provides an opportunity for employees with additional sources of income to declare the extra sources of income at the end of every year. Additional sources of income may include rental income, consultancy, farming or any other businesses. Such taxpayers are required to declare the additional income and file the returns by 30th June.