If your business is VAT registered, one date matters more than any other on your compliance calendar: the 20th. Miss it and the penalties start compounding immediately. Here is exactly what is due, when, and how to stay ahead of it.
What you actually file
Your monthly VAT return on iTax declares output VAT charged on your sales and input VAT paid on your purchases. The difference is what you remit to KRA, or carry forward as a credit. With eTIMS now in force, your declared sales must reconcile with your eTIMS invoices, so gaps between the two are easy for KRA to spot.
No sales this month? File anyway
A common and expensive mistake is skipping the return in a quiet month. If you are VAT registered, a nil return is still mandatory. Not filing at all triggers the same late filing penalty as if you owed tax.
What late filing costs you
- A late filing penalty on the return itself
- Interest on any unpaid VAT, accruing monthly until settled
- A blocked or delayed Tax Compliance Certificate, which can cost you tenders and contracts
How to never miss the deadline
The businesses that never miss the 20th do three things: they keep bookkeeping current rather than reconstructing it at month end, they reconcile eTIMS invoices weekly, and they file in the first half of the month instead of racing iTax traffic on deadline day. If that discipline is hard to sustain in-house, that is exactly what a monthly retainer is for.
This guide is general information for Kenyan SMEs, not formal tax advice for your specific situation. For advice on your own VAT position, talk to us.