Guide · 8 min read
How to File Nil Returns on KRA iTax — and Take Advantage of the Tax Amnesty Programme
Nil returns are the most misunderstood part of Kenya VAT compliance. File them wrong and you pay KES 10,000 per month. File them right and KRA never bothers you. This guide covers both the how and the what-if-you-already-missed-the-deadline.
Explain Like I'm 5: What is a Nil Return?
Think of KRA like your school attendance register. Every month, the teacher calls your name. If you were in class, you say “present” and show your homework (a normal return with sales and VAT). If you were absent but had a valid reason, you still say “present” but your homework is empty (a nil return).
What you cannot do is stay silent. Skipping the register call — even with nothing to report — gets you a detention (KES 10,000 penalty). The teacher does not care that you had nothing to say. You still have to show up.
Bottom line: A nil return = “I showed up, had nothing to report.” No return at all = “I skipped the register call.”
What is a Nil Return in Kenya?
A nil return is a tax return that declares zero activity for a filing period. For VAT, this means:
- You made KES 0 in taxable sales
- You made KES 0 in zero-rated sales
- You made KES 0 in exempt sales
- You incurred KES 0 in purchases with VAT
- KES 0 VAT is payable to KRA
- KES 0 VAT is recoverable from KRA
Every single field on the iTax VAT return reads 0.00. You are telling KRA: “I am still in business, I have nothing to report this month, I am filing because the law requires it.”
Many business owners assume that if they made no sales, they do not need to file. This is the most expensive mistake in Kenya VAT compliance. KRA charges KES 10,000 per month for every late or missing return — even nil returns.
Why File a Nil Return? (“I Had Zero Sales This Month”)
Here is what happens if you skip filing a nil return:
| Scenario | Penalty |
|---|---|
| Filed nil return on time | KES 0 |
| Filed 1 day late (nil return) | KES 10,000 |
| Skipped the month entirely (nil activity) | KES 10,000 + penalty accumulates every month |
| Skipped 3 months of nil returns | KES 30,000 + possible KRA compliance check |
Filing a nil return takes 5 minutes. Not filing costs KES 10,000. That works out to KES 2,000 per minute of your time. Show up for the register call.
How to File a Nil VAT Return on iTax (5 Minutes)
Follow these exact steps. The iTax portal may look confusing but the nil return path is straightforward once you know where to click.
Go to itax.kra.go.ke and log in
Enter your KRA PIN and password. If the login page shows "System Error" or hangs, use a different browser (Chrome works best) or try Incognito Mode. The portal is notoriously unreliable — see our iTax portal troubleshooting guide if you get stuck.
Click Returns in the top menu, then VAT Returns
The dashboard shows a horizontal menu bar. Click 'Returns' then select 'VAT Returns' from the dropdown. You will see a list of filing periods marked 'Due' or 'Overdue'.
Select the filing period (month and year)
Click the month you are filing for. iTax opens a VAT return form with numbered boxes. Most fields will show KES 0.00 by default.
Confirm every field reads KES 0.00
Go through each box: Box 1 (Taxable Sales at 16%), Box 2 (Zero-Rated Sales), Box 3 (Exempt Sales), Box 4–6 (other sales categories), Box 7 (Input VAT), Box 14 (VAT Payable). If iTax pre-fills numbers you disagree with, correct them to 0.00.
Tick the declaration box and click Submit
Find the small checkbox that says "I confirm the information is true and correct." Tick it. Click "Submit." iTax displays a confirmation receipt with a submission ID — screenshot this or save the PDF. That is your proof of filing.
Pro tip: File nil returns before the 10th of every month. iTax is fastest early in the month. After the 15th, the portal slows down as millions of Kenyans race to meet the 20th deadline. Weekend filing is especially smooth — itax.kra.go.ke works on Saturdays and Sundays.
KRA Tax Amnesty Programme 2026: Clean Up Past Non-Compliance Without Paying Penalties
The KRA Tax Amnesty — officially the Voluntary Tax Disclosure Programme (VTDP) — allows you to voluntarily tell KRA about taxes you did not pay on time. In return, KRA waives 100% of penalties and interest. You only pay the principal tax amount.
This is not a rumour or a loophole. It is a formal KRA programme under the Tax Procedures Act. It exists because KRA would rather get the principal tax than chase penalties from taxpayers who cannot or will not pay the full amount.
What the Amnesty Covers
- VAT returns — missed months, late filings, under-declared sales
- Income tax — unpaid instalment tax, unreported income
- PAYE — missed employee tax remittances
- Withholding tax — failure to deduct or remit
- Turnover tax — missed filings or underpayment
- Penalties and interest — on any of the above, if voluntarily disclosed
What the Amnesty Does NOT Cover
- Tax fraud or intentional evasion under criminal investigation
- Tax already detected by KRA through an audit or compliance check
- Tax where KRA has already issued an assessment or demand notice
Important: The amnesty only applies if you disclose before KRA finds you. Once KRA sends an audit notice or compliance letter, you lose eligibility. If you have unfiled returns or unpaid tax, apply now — not after KRA knocks.
How to Apply for the KRA Tax Amnesty
Log into iTax
Go to itax.kra.go.ke and log in with your KRA PIN and password.
Navigate to Voluntary Disclosure
Look for "Voluntary Tax Disclosure Programme" or "VTDP" under the Returns menu. If you cannot find it, use the search bar in iTax.
Select the tax type and period
Choose the tax type (VAT, income tax, etc.) and the specific months or years you are disclosing.
Enter the correct tax figures
State the actual tax that should have been paid. This must be accurate — KRA will verify against their records and eTIMS data.
Submit and pay the principal tax
KRA processes the disclosure and issues a payment slip. Pay the principal tax via M-PESA Paybill 572572. Once paid, the penalties and interest are formally waived.
Example: James missed 4 months of VAT returns. He owes KES 80,000 in principal tax but KRA has added KES 40,000 in late-filing penalties and KES 12,000 in interest — total KES 132,000. Under the tax amnesty, James applies for voluntary disclosure, pays only KES 80,000, and KRA waives the KES 52,000 in penalties and interest.
Penalty Waiver vs Tax Amnesty: What is the Difference?
Kenyans often confuse these two. They are different tools for different situations.
| Penalty Waiver | Tax Amnesty (VTDP) | |
|---|---|---|
| When to use | You filed late or paid late. The return is already submitted but penalties were charged. | You never filed returns or never paid. You are coming clean about past non-compliance. |
| What is waived | Late-filing or late-payment penalties (KES 10,000 + 5% + 1% interest) | All penalties and interest. You only pay the principal tax. |
| Filed return? | Yes — you already filed but missed the deadline | No — you are filing late or disclosing previously undeclared amounts |
| Legal basis | Section 35, Tax Procedures Act | Voluntary Tax Disclosure Programme (VTDP) |
| Best for | Genuine mistake, first-time offence, iTax system error | Multiple missed months, accumulated penalties, unpaid tax |
Common Nil Return Mistakes That Cost Kenyan Business Owners KES 10,000+
✗ "I had no sales so I did not file."
✓ This is the #1 mistake. KRA requires a return every month regardless of activity. File a nil return — it takes 5 minutes.
✗ "I will file two months together next month."
✓ Each month is a separate filing period. Missing January and filing January + February in March means two KES 10,000 penalties. File every single month individually.
✗ "The nil return does not have a submit button."
✓ This is a known iTax bug. Switch to Google Chrome, enable pop-ups for itax.kra.go.ke, or try Incognito Mode. The submit button is usually hidden behind a pop-up blocker.
✗ "I filed a nil return but KRA still charged a penalty."
✓ Check the date you filed. If it was after the 20th, the penalty is automatic. Also confirm you clicked 'Submit' — saving as draft does not count as filing.
✗ "My accountant said nil returns are not necessary."
✓ Some accountants advise skipping nil returns because they take effort to file. This is bad advice. Every unfiled month adds KES 10,000 in penalties. If your accountant says this, get a second opinion.
When to Get Help
Nil returns are simple — 5 minutes per month. But life gets busy. Deadlines slip. The iTax portal crashes on the 19th. Suddenly you have 3 unfiled months, KES 30,000 in penalties, and a KRA compliance letter in your iTax inbox.
Get help if:
- You have multiple unfiled months and are unsure how to catch up
- KRA has already charged penalties and you want a waiver
- You want to use the tax amnesty but do not know how to calculate what you owe
- iTax keeps giving errors and you need someone to file for you
- You just want to outsource the whole thing and never log into iTax again
Let us handle your nil returns every month.
KES 3,500/month. We file on the 17th — before the iTax portal slows down. Nil returns, normal returns, penalty waivers, and tax amnesty applications. M-PESA accepted. Receipts provided.
Frequently Asked Questions About Nil Returns in Kenya
Can I file a nil return on my phone?▼
Do I need a KRA PIN to file a nil return?▼
My business is seasonal. Can I file nil returns for the slow months?▼
What if I file a nil return by mistake when I actually had sales?▼
Does the KRA tax amnesty apply to nil returns?▼
Can KRA waive penalties for nil returns under Section 35?▼
How long does the KRA tax amnesty last?▼
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