You’ve done the responsible thing, and filed your tax returns on time. Maybe you even felt a small sense of accomplishment.
But then, days or weeks later, you realize something is off. Maybe you overstated your income, forgot to include a tax relief, or mistakenly filed under the wrong category. Panic starts to creep in will KRA come knocking? Will there be penalties?
Mistakes happen, and the Kenya Revenue Authority (KRA) allows taxpayers to amend their tax returns to fix errors. However, there’s a proper process to follow, and that’s exactly what this guide will walk you through.
Whether you’re an individual filing PAYE (Pay As You Earn) or a business handling corporate tax, VAT, or rental income tax, knowing how to amend your return can save you from potential penalties and ensure you’re on the right side of tax compliance.
What Is an Amended Tax Return?
Think of an amended tax return as a second chance to get things right. It’s a correction of an already-submitted tax return when you realize you’ve made an error or left out important details.
The KRA allows taxpayers to amend their returns through the iTax system, whether it’s for personal income tax, corporate tax, VAT, or rental income tax. However, an amendment can only be made once per tax period, so you need to make sure everything is accurate before submitting it.
Why Would You Need to Amend Your Tax Return?
Most people don’t go back to check their tax returns after filing. But here are some common reasons you might need to:
1. You Reported the Wrong Income
Maybe you input the wrong figures, forgot to include a side hustle or overestimated earnings. Incorrect income reporting can inflate your tax bill or underreport your liability, triggering penalties.
2. You Forgot to Claim Deductions or Reliefs
- •KRA allows various tax reliefs and deductible expenses, such as:
- •Insurance Relief, If you have a registered life insurance policy, you qualify for relief.
- •Mortgage Interest Relief, If you have a mortgage, you can deduct the interest paid.
- •Pension Contribution Relief, Contributions to NSSF, or other registered retirement schemes qualify for tax relief.
If you forgot to include these, you could end up paying more tax than necessary.
3. You Used the Wrong Tax Rate
Businesses and self-employed professionals often find they applied the wrong tax rate, especially with the different VAT rates (16% vs. 8%) or the new Turnover Tax (TOT) regulations.
4. KRA Has Notified You of a Discrepancy
If KRA audits your return and finds an issue, they may ask you to submit an amended return to correct it.
Step-by-Step Guide to Filing an Amended Tax Return
Now that you know why you might need to file an amendment, let’s walk through how to do it on iTax.
Step 1: Log in to iTax
Go to the KRA iTax portal and log in using your KRA PIN and password.
Step 2: Navigate to the ‘Returns’ Tab
- •Once logged in, go to “Returns” > “File Return”
- •Select the tax obligation you are amending (Income Tax, VAT, etc.).
- •Click “Amend Return” to proceed.
Step 3: Select the Tax Period to Amend
- •Choose the year and period of the tax return that needs correction.
- •The system will display your previously filed return for reference.
Step 4: Download the Tax Return Form and Make Corrections
- •Download the original return and open it in Excel.
- •Adjust only the incorrect fields whether it’s income details, deductions, reliefs, or tax rates.
- •Do not alter other fields that were correct in the initial filing.
Step 5: Validate and Upload the Amended Return
- •After making corrections, click “Validate” in the Excel form.
- •Save the validated return as an XML file.
- •Upload it back onto the iTax portal and submit it.
Step 6: Confirm and Submit
- •Double-check that all details are accurate.
- •Click “Submit” and download the acknowledgment receipt.
What Happens After Filing an Amended Return?
Once you’ve submitted the amendment, there are two possible outcomes:
You Overpaid Tax – If your corrected return shows that you overpaid tax, you can apply for a refund via iTax. However, refunds are subject to KRA approval, which may take weeks or months.
You Underpaid Tax – If your corrected return shows that you owe KRA money, you will need to pay the difference immediately to avoid interest charges.
Conclusion
Filing an amended tax return in Kenya doesn’t have to be a headache. Whether you’re fixing a minor clerical error or correcting major income discrepancies, following this guide will help you navigate the process smoothly.
Tax compliance is an ongoing responsibility, and the best way to avoid errors is by keeping accurate records and staying informed about tax laws. If in doubt, consult a tax professional or visit the KRA website for official guidance.
