Big relief for jobless Kenyans as KRA replaces Nil returns requirement: What it means

The Kenya Revenue Authority (KRA) has eliminated the long-standing requirement for individuals with no taxable income to file annual Nil Returns, replacing it with a new “PIN with No Obligation” (PWO) category.

The change, announced through an official iTax enhancement and detailed in KRA’s step-by-step guide, aims to simplify compliance for taxpayers who need a KRA PIN for administrative purposes but are not engaged in any gainful or taxable activities.

“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 (e.g. Students that need a PIN to access Higher Education Loans, Diplomats),” the guide states.

Under the new system, holders of a PWO PIN will not be required to file any tax returns, including Nil Returns. The category is available to both Kenyan residents and non-Kenyan non-residents (such as diplomats). 

Applicants need only a National Identity Card (or Diplomatic ID for non-residents) and can register directly via the iTax portal by selecting “New PIN registration,” choosing “Individual,” “Online form,” and answering “Yes” to registering for a PIN with no obligation.

A pop-up obligation notice appears during the process, after which users complete basic details including residential status, contact information, and reason for application. 

Upon successful submission, a unique 11-character PIN (starting with “A”) is issued instantly for residents.

If a PWO holder later begins earning taxable income or engaging in taxable activities, they must amend their PIN on iTax to add the relevant tax obligations and commence filing returns. Failure to do so will attract standard penalties under Kenyan tax law.

According to KRA guidelines, the late-filing penalty for individuals is the higher of 5% of the tax due or Sh2,000.

KRA has noted that development is still ongoing for existing PIN holders who currently have tax obligations and wish to transition to the PWO category. Those individuals should continue complying with their existing obligations until further guidance is issued.

The reform follows earlier temporary suspensions of Nil filing earlier in 2026, during which KRA reviewed taxpayer data to expand the active tax base.

Many students, unemployed individuals, and others had previously found the annual Nil Returns process burdensome despite having zero income.

According to the taxman, the move streamlines administration while maintaining the integrity of the tax register. 

Individuals with income from any source, including employment, business, or rentals, must still file their 2025 income tax returns by the standard deadline of 30 June 2026.