KRA says PAYE refund processing takes 120 to 180 business days.
KRA has clarified its refund processing timeline after a taxpayer questioned a claim that remained pending months after submission.
The Kenya Revenue Authority (KRA) says processing PAYE refunds takes between 120 and 180 business days. The clarification followed a taxpayer’s complaint about a pending claim for tax overpayments.
The taxpayer said they applied in July and submitted all required documents, but still awaited approval months later. They also complained that they had received no update from the authority.
In its response, KRA said it was still processing the application. It added that the taxpayer would receive communication through their registered email once processing ended.
Who qualifies for PAYE refunds?
According to KRA, workers qualify when their annual tax liability falls below the amount their employer deducted and remitted. This can happen when an employer deducts excess tax, particularly where earnings change during the year.
Similarly, someone who works for fewer than 12 months in a year may qualify for a refund. Workers can also claim when their employer leaves eligible reliefs or deductions out of payroll calculations.
These include mortgage interest relief, insurance relief, pension contributions, disability exemptions and standard personal relief. Such omissions can leave a worker paying more tax than they owe.
Taxpayers must lodge claims through iTax within five years of payment. A KRA officer then reviews supporting records, including P9 forms, payslips and relief certificates.
Verification, payment and objection deadlines
KRA checks the claimed figures against the employer’s PAYE returns. However, large claims, mismatched figures or first-time applications may trigger an audit, extending the wait to 180 days.
If details are missing, the authority requests additional information through iTax or email. It also recovers outstanding taxes, penalties or interest from the refund before paying the balance.
The Tax Procedures Act treats an application as approved if KRA fails to communicate its decision within 120 days. Where an audit applies, that period extends to 180 days.
Once approval takes effect, KRA has six months to pay the refund. If it misses that deadline, it owes interest at one per cent per month.
Meanwhile, taxpayers whose applications KRA rejects have 30 days to object through iTax. The authority communicates its response through the taxpayer’s registered email.
