The June 30 deadline for filing 2025 Income Tax Returns has come and gone, and KRA was firm about one thing: there would be no extension. Despite reports of iTax slowdowns in the final days as traffic surged, KRA held the line, urging taxpayers to file through alternative channels like WhatsApp, eCitizen, USSD rather than wait for a reprieve that was never coming.

If you missed the deadline, here's what happens

KRA has been explicit that taxpayers who failed to file by midnight on June 30 are liable to statutory penalties and may face default assessments. The penalty structure is straightforward, a penalty of Ksh20,000 or 5% of the tax due, whichever is higher, plus interest on any outstanding amount for companies and the penalty is Ksh2,000 or 5% of the tax due, whichever is higher, plus interest on any outstanding amount for individuals. Default assessments, issued under Section 29 of the Tax Procedures Act, allow KRA to estimate your tax liability on your behalf when no return has been filed, and that estimate is rarely in the taxpayer's favour.

If you're in this position, the priority isn't to wait and see whether a notice arrives. It's to file immediately, even late, and to be prepared to engage with KRA on any resulting penalty or assessment. Filing late remains far better than not filing at all.

However, a tax amnesty window is now open under the 2026 Finance Act effective 1 July 2026. Taxpayers may qualify for a 100% waiver of penalties, interest and fines relating to tax liabilities accrued up to 31 December 2025, provided the principal tax is settled or brought under an approved payment plan by 31 December 2026. 

The eTIMS concession was a one-year bridge, not a new norm

A lot of the confusion this filing season centred on eTIMS. For the 2025 Year of Income specifically, KRA allowed taxpayers to declare valid business expenses that weren't backed by eTIMS or TIMS generated invoices. This wasn't a blanket pass. It required taxpayers to use a dedicated "Manual Non eTIMS/TIMS Expenses" feature on iTax, submit a completed CSV template with transaction level detail (supplier names, invoice numbers, dates, descriptions, amounts), and bundle supporting documentation into a single PDF for KRA to review. Every declared expense under this route is still subject to post submission validation, so "manual" never meant "unchecked."

That relief was tied to the 2025 return only. KRA was equally clear that from the 2026 Year of Income onward, this door closes. All declared income and expenses must be supported by valid electronic tax invoices generated and transmitted through eTIMS/TIMS. The legal basis isn't new. It sits in Section 23A of the Tax Procedures Act, 2015 and the Tax Procedures (Electronic Tax Invoice) Regulations, 2024.

What This Means If You Just Filed

Where you land after filing generally falls into one of three buckets:

1. You didn't file at all. Act now. Default assessment can follow at any time, and it typically won't work in your favour.
2. You filed, but used manual invoices, non-eTIMS records, or made adjustments to declared income or expenses. Don't be surprised if you receive a compliance message flagging specific expense. This is a validation step KRA has built into the 2025 filing process, not a random flag. Treat it as an invitation to review your records now, while you still have time to respond or correct, rather than something to set aside.
3. Everything auto populated cleanly from your P9, eTIMS records, and existing tax data. That's the target state KRA is steering every taxpayer toward, and it's a reasonable benchmark to hold yourself to for the rest of this year.

Getting Ahead of the Second Half of 2026

Because the eTIMS concession doesn't carry over, the practical work now is making sure your invoicing habits for the second half of 2026 don't create the same problem again next filing season. A few things worth doing in the coming weeks:

• Run a midyear records check. Look specifically at expenses from January through June 2026 and confirm which ones are backed by valid eTIMS/TIMS invoices versus which are still manual or undocumented.
• Close the eTIMS gap now, not in December. If parts of your business, certain suppliers, and certain expense categories routinely fall outside eTIMS, that's the exact issue KRA's 2026 rules are designed to force out. Integrating those transactions into eTIMS now avoids a scramble at yearend.
• Watch the filing calendar for next year. Tax advisors have flagged those upcoming changes under the Finance Act, 2026 will stagger return deadlines. Individual taxpayers filing by April 30 and non-individual taxpayers by June 30 partly as a response to the platform congestion seen this season. It's a change worth planning around rather than reacting to later.
   

The Bottom Line

KRA's message this filing season wasn't really about a single deadline. It was about signalling that the era of informal, after the fact documentation is ending. The 2025 return was the last year with a safety net for non-eTIMS expenses. From here, compliance isn't a matter of catching up once a year, it's a habit that needs to be built into how income and expenses are recorded from the point of transaction. Taxpayers who start that shift now, in the middle of 2026, will have a materially easier time than those who wait for the next deadline to force the issue.

Should you require assistance with tax amnesty applications, eTIMS reconciliations, or meeting the 2026 tax compliance requirements, the SKM team is available to support you. We can assist in reviewing your tax position, addressing any outstanding compliance matters, reconciling your records, and regularizing any identified issues to ensure accurate filings, facilitate compliance with KRA requirements, and minimise potential tax risks or future disputes.