Finance Bill 2026: Mbadi clarifies proposed tax return filing timelines

Speaking during the Citizen TV X Space discussion on the Finance Bill 2026, Mbadi explained that the proposal seeks to space out filing deadlines for different categories of taxpayers, including nil filers, salaried employees, and business taxpayers.

According to the CS, the current system, where most taxpayers file returns within the same period, often results in last-minute congestion and technical challenges.

"We had one filing period for everyone, and many Kenyans naturally wait until the last day. This ends up overwhelming the system and creates challenges, yet failure to file returns still attracts penalties under the law," Mbadi said.

He clarified that under the proposed changes, taxpayers with nil returns would be required to file by December of the same year rather than waiting until June of the following year.

"For nil filers, the position is straightforward. If by December you have not earned any taxable income, there is no reason to wait until June 30 of the following year to file your nil return. You can file immediately," he explained.

For salaried employees whose taxes are already captured through the PAYE system and reflected in their P9 forms, Mbadi noted that the proposed deadline would move to April, giving them four months after the end of the tax year to submit their returns.

"If you have from January to April to file returns for a year that ended on December 31, that is sufficient time for someone earning a salary to comply," he noted. 

The CS further clarified that the filing deadline for business taxpayers would remain unchanged at June 30, dismissing concerns that all taxpayers would be subjected to a shortened filing period.

"Business taxpayers will continue filing by June 30. If there is any ambiguity in the wording, we will ensure the provision is clarified so that taxpayers fully understand it," he assured.

Mbadi also rejected claims that the Finance Bill 2026 seeks to grant additional powers to the Kenya Revenue Authority (KRA), maintaining that the proposal primarily aims to improve administrative efficiency and taxpayer compliance rather than increase enforcement powers.