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Beyond the Filing Deadline: Key Tax Considerations for SMEs Ahead of the 2025 Income Tax Return

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  As the 30 June filing deadline approaches, attention naturally turns to the preparation and submission of annual income tax returns. For many SMEs, the immediate priority is ensuring that returns are filed within the prescribed timelines. Equally important, however, is the quality of the information being submitted and the extent to which it is supported by the underlying records of the business. The annual income tax return is the culmination of a year's worth of transactions, commercial decisions, and tax positions. The filing process therefore provides an opportunity for businesses to revisit key areas of their tax affairs, reconcile financial records, and confirm that the positions reflected in the return are consistent with both statutory requirements and the underlying commercial realities of the business. As businesses prepare their 2025 Income Tax Returns, several areas merit particular attention. Supporting Business Expenditure The deductibility of expenditure depends no...
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Income Tax Filing Changes Driven by eTIMS: What Taxpayers Need to Know

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  In a bid to drive compliance efforts following the implementation of eTIMS, KRA has made it even more exhaustive by ensuring compliance for not only VAT but also Income Tax. The authority has reshaped how Income Tax is prepared, declared and validated using eTIMS. All of this is as an effort of KRA to enforce a more data driven and transparent tax system. Some of these changes are backed by the law and KRA is just enforcing what has already been stipulated. Section 23A(4) of the Tax Procedures Act (Kenya) and Paragraph 10 of the Tax Procedures (Electronic Tax Invoice) Regulations 2024 for instance stipulates how some expenses are not to be validated against Etims. These exclusions include airline passenger ticketing, employment-related expenses such as salaries and wages, interest expenses, and financial institution charges. Additionally, investment allowances and internal accounting adjustments captured in dedicated tax computation fields are not subject to eTIMS validation. If ...
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Key Changes to 2025 Income Tax Filing — KRA Commissioner Explains What Taxpayers Need to Know

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  The Kenya Revenue Authority (KRA) has outlined a series of significant updates and procedural changes that will shape the 2025 income tax filing season — many of which will directly affect how individuals and businesses prepare, validate and submit their annual returns. 1. Shift to Pre-Populated Returns For the 2025 filing year, KRA is accelerating its drive toward automation. A growing number of taxpayers — especially salaried individuals and those with employer-reported income — will find their returns pre-populated with information already available on KRA systems. Taxpayers are expected to review, verify and confirm these records rather than fill in every detail manually. What to do: Log into iTax early, reconcile reported income and deductions, and ensure accuracy before submission. 2. Enhanced Data Validation Requirements In line with its data-driven compliance strategy, KRA will validate declared income and expenses against multiple data sources — including employer PA...
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