This guide explains how taxpayers in Kenya can claim a tax refund from the Kenya Revenue Authority (KRA). Tax refunds occur when individuals or corporations overpay taxes or qualify for specific tax incentives. Here’s a step-by-step guide to understanding eligibility, the types of refunds, and the application process.
Types of Tax Refunds
- Income Tax Refunds
These arise from:- Over-deduction of tax (PAYE) by employers.
- Tax incentives such as mortgage interest relief, insurance premium relief, and annual tax relief.
- Exemptions due to disability.
- Overpayment of installment taxes.
- Withholding tax or advance tax credits.
- Note: Claims must be made within five years of the tax payment date.
- VAT Refunds
Common causes include:- Excess credits from zero-rated supplies or withholding VAT.
- Bad debts where no payment has been received for the supply within 3–4 years.
- Excise Tax Refunds
Refunds apply for:- Damaged or stolen goods during transportation.
- Returned goods as per the contract of sale.
- Excise duty paid on materials used to manufacture un-excisable goods.
Eligibility for Tax Refunds
You may qualify for a tax refund if you fall into one of these categories:
- Life and Education Insurance Policyholders:
- If relief wasn’t received from your employer.
- Mortgage or Home Ownership Plan Holders:
- Must be from institutions listed under the 4th schedule of the Income Tax Act for owner-occupied properties.
- Residents Without Personal Relief:
- If personal relief was not granted during the tax year.
- Excess Tax Deduction:
- If tax deducted at source exceeds your final liability.
Steps to Claim a Tax Refund
- Log in to iTax
- Visit iTax Portal.
- Use your KRA PIN and password to log in.
- Select Refund Option
- Navigate to the “Refunds” menu.
- Select the applicable tax obligation for your claim.
- Verify Details
- Confirm your taxpayer information.
- Provide Bank Details
- Enter the bank account details for receiving the refund.
- Select Refund Type and Reason
- Choose the refund type.
- Specify the claim reason and provide the refund amount.
- Upload Supporting Documents
- Attach all required documentation.
- Submit the Claim
- Review the information and submit your claim.
Tips for Successful Refund Claims
- Ensure all claims are submitted within the stipulated time frame via iTax.
- Have valid debt status reports before processing.
- Be prepared for pre-payment audits, especially for first-time claimants.
Processing Time
- Refund processing takes at least 90 working days (Monday to Friday).
- Use the Refund Acknowledgement Receipt number provided upon submission to track your refund status.
Penalties for Fraudulent Claims
Submitting a false claim is a serious offense, punishable by:
- A penalty equal to twice the value of the fraudulent claim.
KRA Contacts
- Phone: +254 20 4 999 999 / +254 711 099 999
- Email: [email protected]
By adhering to these guidelines, you can efficiently navigate the tax refund process and recover overpaid taxes or eligible incentives.
