The Kenya Revenue Authority (KRA) has introduced a revamped Pay As You Earn (PAYE) tax return system set to become compulsory for all employers beginning July 1, 2025.
This new system, announced in a public notice on June 23, is designed to streamline the filing and payment process while improving the overall user experience for taxpayers.
According to KRA, the updated method responds directly to widespread taxpayer feedback calling for a less complex process. It targets employers across all sectors—public, private, and non-governmental—making it easier for them to manage payroll tax obligations.
One of the standout features of the revised system is its integration with existing government frameworks, including the Integrated Financial Management Information System (IFMIS) and the Central Bank of Kenya (CBK).
Moreover, it incorporates a Human Resource Information System (HRIS) through an Application Programming Interface (API), allowing for seamless data transfer and automation.
The new system enables employers to submit returns based on specific employee categories. This categorization aligns with the varying types of employment arrangements, thus ensuring greater accuracy and flexibility.
Additionally, the system supports automatic deduction and remittance of statutory obligations such as PAYE, the Affordable Housing Levy, and the National Industrial Training Authority (NITA) Levy.
To use the system, employers must first download the new Simplified PAYE Return Excel Template from the KRA website (https://www.kra.go.ke/publications).
The template comes with detailed instructions and sample CSV files to assist users. After inputting the necessary payroll data, employers can validate and submit their returns via the KRA portal or through linked internal systems using APIs.
KRA advises all employers to adopt the new format immediately to avoid last-minute hitches that could lead to compliance issues or financial penalties.
For those who may encounter challenges, the authority has made available support services through their customer care lines at 020 4 999 999 or 0711 099 999 and via email at [email protected].
In a statement, KRA emphasized its commitment to continuous improvement and sector-specific solutions, saying it appreciates taxpayer input and remains focused on simplifying compliance procedures for all.
