Clients who missed the 2025 income tax return deadline
What a Kenyan client that missed the 30 June 2026 deadline for its 2025 return now faces: default assessments, blocked filings, penalties and objections.
By Achekam · · 5 min read · For Accountants & audit firms in Kenya
Every firm has a few. The client who sent nothing in May, promised everything in June and then went quiet. The deadline for 2025 income tax returns has passed, and the question now is not how to file on time but how to limit the damage.
The damage is real, but it is manageable if the firm moves in the right order. KRA has said what it will do about returns that were not filed, iTax has its own rules about what it will accept, and the law gives a route to dispute an assessment that gets the figures wrong. This article sets out each of those for the client that missed the date.
The date that passed
KRA says income tax returns for the 2025 year of income had to be filed by 30 June 2026. Its public notice dated 8 June 2026, on filing 2025 income tax returns, set that date out and explained what would follow for those who missed it.
For companies, the timing also follows the accounting period. KRA says the IT2C is due by the end of the sixth month after the year-end, so a company with a 31 December 2025 year-end faced the same 30 June date. A company with a different year-end has its own deadline, and should not be swept into the same letter without checking.
Default assessments under section 29
KRA says taxpayers who did not file 2025 returns by 30 June 2026 are subject to default assessments under section 29 of the Tax Procedures Act, Cap 469B. In plain terms, KRA may raise an assessment on the information it has, without waiting for the client's return.
That information is not nothing. KRA already compares returns with eTIMS data, withholding records and customs entries, so a default assessment may start from income KRA can see while leaving out expenses it cannot. The figure is likely to be unfavourable, which is the main reason to file the real return quickly rather than wait to see what arrives.
Why iTax wants the earlier returns first
KRA says iTax will not accept a current return until any missing returns for earlier periods have been filed. A client that missed 2025 may also have gaps from earlier years, and the 2025 return will not go through until those are dealt with.
So the first step for a late client is a compliance check on iTax: which periods are missing, for which obligations. Only then can the firm plan the sequence of filings. The detail of that problem is in when iTax asks for earlier returns.
What the client should expect to pay
For a company or partnership, KRA says late filing of an income tax return attracts a penalty of 5% of the tax due or KES 20,000, whichever is higher, and late payment of income tax by non-individuals attracts 5% of the tax due plus interest of 1% per month. These are KRA's figures at the time of writing.
Prepare the client for both. The late filing penalty applies even where little tax is due, because of the fixed minimum. Interest runs from the original due date until payment, so paying the tax as soon as it is known stops the meter even if the return itself takes a few more days.
The 2025 expense allowance
KRA's notice allowed taxpayers filing 2025 income tax returns to declare valid business expenses that were not supported by eTIMS or TIMS invoices, uploaded at filing and subject to KRA validation afterwards. The allowance applies only to 2025 returns.
For a late filer this is worth knowing, but not worth assuming. The allowance is tied to 2025 returns; confirm with KRA how it treats one that arrives after the deadline before building the return around expenses that have no eTIMS invoice. Whatever the answer, upload the supporting documents with the return so that the later validation has something to work with.
Challenging a default assessment
If KRA has already raised a default assessment, filing the real return is part of the answer, not all of it. KRA says a taxpayer who disputes a tax decision may lodge a written notice of objection with the Commissioner within thirty days of being notified of the decision, under section 51(2) of the Tax Procedures Act.
Thirty days passes quickly when the client is slow to forward KRA's letters. Ask every late client to send any KRA correspondence the day it arrives. The requirements for a valid objection, and where to serve it, are in making a notice of objection valid.
Where the client files and later finds an error, KRA says it can submit an amended return on iTax, and should do so promptly where more tax becomes payable, to avoid further penalties and interest.
How Achekam helps with the recovery
Achekam computes objection and appeal deadlines for Kenyan assessments from its approved administration rule, ending at the close of the day in Nairobi time. Its filing calendar leaves out any deadline whose rule is awaiting approval or contested and says why, so the team can see which dates it must diary itself.
Achekam does not file Kenyan returns. A person with the firm's KRA filing permission files on iTax and uploads the acknowledgement, and a different person verifies it before the return counts as filed. For a late client, that verified acknowledgement is the record the firm will want when KRA's next letter arrives.
A recovery sequence for a late client
- Check iTax for every missing return, not just 2025.
- File the earlier gaps first, oldest to newest.
- Prepare the 2025 return, uploading support for any expense without an eTIMS invoice.
- Pay the tax as soon as it is known, to stop interest.
- If a default assessment has been issued, diary the thirty-day objection date at once.
- Keep every acknowledgement, verified, on the client's file.
Then turn to next year. A client that missed one deadline is likely to miss the next unless something changes; the individual returns deadline is a useful reminder for owners who also file personally.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
