Mistakes that will get your tax return rejected this year

Filing your tax return used to be straightforward. Enter your figures, submit, and wait. Now, the system checks your return instantly before it even goes through. If something doesn’t add up, it gets rejected on the spot.

KRA explains it plainly: “your return is checked instantly against multiple systems before it is accepted.” That means what you declare has to match what already exists in their records.

Here are the mistakes that are likely to trip you up, with real examples.

Your income is now cross-checked against eTIMS sales and withholding tax records. If your figure is lower, your return won’t pass.

For example, say you run a small electronics shop. Your eTIMS system shows total sales of Sh5 million for the year.

But when filing, you declare Sh4 million, maybe because of cash sales you forgot to record or an attempt to reduce tax. The system picks the higher figure and rejects your return.

KRA is clear on this: “the declared income must be equal to or greater than the higher of the total eTIMS invoice value or the gross WHT income.”

Expenses are no longer just entries in your books. They must be backed by eTIMS-compliant invoices.

Take a contractor who claims Sh2 million in material costs. If only Sh1.2 million is supported by valid eTIMS invoices, the extra Sh800,000 is flagged. The system will either reject the return or force a correction.

KRA states, “expenses must be supported by eTIMS-compliant invoices with the PIN correctly captured.” Even small errors like a missing PIN can make an expense invalid.

Withholding tax credits must match official records. You cannot claim what is not supported.

For instance, if a consultant earns Sh1 million and Sh50,000 is withheld, that credit must appear in KRA records with a valid certificate. If the consultant claims Sh80,000 instead, hoping to adjust later, the system will reject it.

This is because credits are matched directly with certificates and declared income.

Your suppliers now affect your taxes more than you might expect. If they are not issuing eTIMS-compliant invoices, your expenses may be disallowed.

Imagine you buy goods worth Sh500,000 from a supplier who is not properly onboarded on eTIMS. Even if you paid and recorded the purchase, that expense may not be accepted.

KRA notes that some purchases are “automatically disallowed” if they come from non-compliant sources.

The safest approach is to reconcile everything early. Compare your sales with eTIMS reports, check that every expense has a valid invoice, and confirm your withholding tax certificates are accurate.

As KRA advises, “reconcile your figures with source documentation before resubmitting.” In practice, that means treating filing as a verification step, not a guess.