This article serves as a comprehensive guide on how to claim a tax refund from the Kenya Revenue Authority (KRA). In Kenya, taxpayers who have overpaid taxes or paid taxes in error are eligible to claim a tax refund. A tax refund reimburses the excess tax amount paid by an individual or corporation during a specific period.
Understanding the steps for applying for a tax refund is essential for taxpayers seeking to recover overpaid taxes or those eligible for specific tax incentives.
Types of Tax Refunds
There are several categories of tax refunds available to Kenyan taxpayers:
1. Income Tax Refunds
Income tax refunds can arise from various circumstances, including:
- Over-deduction of Pay As You Earn (PAYE) tax by your employer
- Tax incentives, such as mortgage interest relief, insurance premium relief, or annual personal relief
- Exemptions due to disability status
- Overpayment of installment taxes
- Excess withholding tax or advance tax credits
Note that claims for income tax refunds must be submitted within five years from the date the tax was paid.
2. VAT Refunds
VAT refunds occur due to overpayment under the following conditions:
- Excess credits arising from zero-rated supplies (e.g., exports)
- Overpayment caused by withholding VAT
- Bad debts, where payment hasn’t been received within three to four years from the date of supply
3. Excise Tax Refunds
Taxpayers can claim excise tax refunds when dealing with excisable goods under certain conditions, such as:
- Goods being damaged or stolen during transportation
- Goods returned under contract of sale
- Excise duty paid on spirits or kerosene later used to manufacture un-excisable goods
Eligibility for KRA Tax Refunds
The KRA provides tax refunds to certain groups of taxpayers who meet specific criteria. You may be eligible for a tax refund if you belong to one of the following categories:
1. Individuals with Life and Education Insurance Policies
If you hold insurance policies covering life or education and have not received any tax relief through your employer, you may qualify for a tax refund.
2. Individuals with Mortgage Plans or Home Ownership Schemes
If you have a mortgage or home ownership plan from designated financial institutions (as listed in the 4th Schedule of the Income Tax Act) and have not received relief from your employer, you are eligible for a tax refund.
3. Resident Individuals Without Personal Relief
Residents who were not granted personal relief during the tax year may also qualify for a refund.
4. Excess Tax Deducted at Source
Taxpayers who have had excess tax deducted at source that exceeds their final tax liability are eligible for refunds.
How To Apply for a KRA Tax Refund
Follow these steps to apply for a tax refund from KRA:
1. Log in to iTax
Access the KRA iTax portal by visiting itax.kra.go.ke. Log in using your KRA PIN and password.
2. Select Tax Obligation
Under the “Refunds” section, choose the relevant tax obligation (income tax, VAT, excise duty) for which you’re claiming a refund.
3. Confirm Taxpayer Details
Verify your taxpayer details and proceed to the next step.
4. Provide Bank Account Details
Enter your bank account information, where the refund will be credited.
5. Select Refund Type and Claim Reason
Choose the appropriate refund type (income tax, VAT, or excise tax) and specify the reason for your claim. You must also include a description of the reason and the refund amount.
6. Upload Supporting Documents
Attach any necessary supporting documents to validate your claim, such as a letter from your employer, receipts, or any other relevant paperwork.
7. Submit the Claim
Review all the provided information and submit your refund claim. You will receive a Refund Acknowledgement Receipt number, which you can use to track the status of your claim.
Tips for Applying for KRA Tax Refunds
- Ensure that all refund claims are submitted via iTax within the stipulated period (usually within five years of the tax payment).
- All claims must have a valid debt status report before processing.
- First-time claimants may undergo a pre-payment audit for verification purposes.
Processing Time for Tax Refunds
The processing of tax refunds by KRA takes at least 90 working days. Working days are Monday to Friday, excluding public holidays. Once your application is submitted, you can track the progress of your claim using the Refund Acknowledgement Receipt number provided.
Important Note:
Attempting to file a fraudulent or false claim for a tax refund is a serious offense. Offenders may be required to pay an amount twice the value of the claimed refund and could face additional legal consequences.
By following the guidelines outlined in this comprehensive guide, taxpayers can confidently navigate the process of claiming a tax refund from KRA. It’s essential to provide accurate information, attach all supporting documents, and meet specific deadlines to ensure your refund is processed smoothly.
If you need further assistance or have any inquiries, you can reach KRA via:
Phone: +254 20 4 999 999 or +254 711 099 999
Email: callcentre@kra.go.ke
