KRA Ends Nil Returns, Announces New Tax Rule for Kenyans Without Income
The change redefines how taxpayers who are not actively earning or involved in taxable activities maintain compliance within the tax framework.
Marvin Chege 
In a significant policy shift, the Kenya Revenue Authority (KRA) has done away with the Nil Returns system, replacing it with a new “PIN with No Obligation” (PWO) category designed to improve compliance among individuals with no taxable income.
The change redefines how taxpayers who are not actively earning or involved in taxable activities maintain compliance within the tax framework.
Previously, such individuals had to file Nil Returns every year to stay compliant, a requirement many viewed as unnecessary and cumbersome.
Under the new framework, that obligation has been removed, meaning those registered under the PWO category will no longer need to submit annual tax returns, effectively phasing out the Nil Returns system.
Photo of a laptop logged into KRA's iTax website. /X
"iTax has been enhanced to enable Individual Taxpayers (both Residents and Non-Kenyan Non-Residents) to generate a PIN with No Obligation," KRA announced.
Further clarifying that "This is an initiative aimed at enhancing the integrity of the taxpayer register to facilitate a certain category of taxpayers who may not be engaged in gainful and taxable activities but still require a PIN."
KRA indicated that the category targets groups such as students and others who may need a PIN for purposes like accessing higher education loans or carrying out non-taxable transactions.
However, the Authority cautioned that individuals registered under PWO who later start earning income or engaging in taxable activities must update their PIN status and begin filing annual returns.
Failure to comply, KRA warned, could attract penalties. The Authority imposes a fine of Ksh20,000 or 5 per cent of the tax due for companies, and Ksh2,000 for individuals, whichever is higher.
KRA further noted that systems are still being developed to allow taxpayers with existing PINs with obligations to switch to the 'PIN with No Obligation' category.
Applicants seeking PWO status have been directed to apply through the iTax portal, with a national identity card listed as the only requirement.
The update comes amid intensified enforcement efforts by KRA targeting non-compliant taxpayers, with those earning income advised to file their annual returns by June 30, 2026, to avoid penalties.
