The National Treasury has proposed a reduction in the time under which Kenyans can file nil returns and income tax at the end of an income-earning year.
The Finance Bill 2026 proposes amendments to the Income Tax Act to push back the income tax filing deadline from June 30 to April 30.
This deadline will apply to tax remitted for any earnings by the individual defined as income in the Income Tax Act.
"Section 52B of the Income Tax Act is amended in subsection (1) by deleting the words "including a self assessment of his tax from all sources of income, no later than the last day of the six month following the end of his year of income" Appearing in paragraph (i) and substituting therefore the words " by the last day of the fourth month of the person's year of income.
"(ii) by deleting the words "including a self assessment of his tax from all sources of income, no later than the last day of the six month following the end of his year of income" ppearing in paragraph (ii) abd substituting therefore the words " by the last day of the fourth month of the person's year of income," the Bill reads in part.
Kenyans seeking to file Nil Returns will now be required to do so by January 31 of the next year.
"Section 52B of the Income Tax Act is amended by inserting the following subsection immediately after subsection (1) - (1A) Where the tax return submitted under subsection (1) relates to a nil amount of tax payable, the person required to submit the tax return shall submit the reutn within one month following the end of the year of income to which the return relates," the Finance Bill continues.
Currently, the provision allows Kenyans to file individual income returns by June 30, including those filing nil returns.
The Finance Bill 2026 proposed an exemption of VAT from certain goods, including scrap metal, raw materials used in the manufacture of animal feeds, pharmaceutical products and human and animal dialysers.
Goods and services under the public-private partnership infrastructure projects will also be exempted from VAT upon approval from the Treasury.
The Finance Bill proposes to tax non-residents earning rental income from property owned in Kenya through the introduction of a Non-Resident Rental Income Tax.
This will be a final tax at a rate specified in the Third Schedule, which the Bill proposes to set at 10 per cent.
