KRA Flags 392,000 Taxpayers for Filing False Nil Returns Using Bank and M-Pesa Data

The Kenya Revenue Authority (KRA) has intensified enforcement against taxpayers filing nil returns despite having financial activity.

Starting March 26, 2026, KRA auto-populates tax returns via the iTax portal. Notably, income from M-Pesa, banks, and eTIMS is now automatically captured.
Consequently, taxpayers cannot hide active earnings by submitting nil returns.

Discrepancies Now Trigger System Checks

Although the nil return option remains, the system flags inconsistencies immediately.
If transactions exist under a taxpayer’s PIN, KRA requires justification or rejects the return. Thus, submitting false nil returns may trigger audits and penalties.

Real-Time System Integration

KRA integrates its systems with Safaricom and major banks for instant financial visibility.
This integration enables accurate monitoring of mobile and bank transactions nationwide. So far, authorities have flagged approximately 392,000 taxpayers for potential tax evasion.

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Penalties and Legal Risks

Incorrect nil filings expose taxpayers to backdated taxes, audits, and up to 25% penalties. Additionally, monthly interest compounds unpaid taxes.
Failing to file any return results in a KSh 20,000 fine, emphasizing compliance importance.

Eligibility for Genuine Nil Returns

The nil filing option remains valid for taxpayers with zero income in 2025.
KRA plans to restore full functionality after March 31, 2026, following system validations. Therefore, only truly eligible filers can use the nil option without risk.

KRA’s crackdown signals stricter enforcement of digital transaction transparency. Taxpayers are advised to maintain accurate records and avoid filing misleading nil returns.