Kenyan taxpayers will soon have the legal right to review and correct tax returns pre-filled by the Kenya Revenue Authority (KRA) before they are treated as final, following amendments adopted into the Finance Bill 2026.
Under the amended Clause 48, which revises Section 75 of the Tax Procedures Act, the Commissioner must notify a taxpayer once a pre-populated return has been issued, with such returns to be released by the end of January each year. Taxpayers will then have two months from the date of issue to either confirm the figures or amend them, addressing what lawmakers described as a gap that previously left people unable to challenge KRA generated numbers.
The pre-population system, which took effect on January 1, 2026, draws on alternative data sources including withholding tax certificates, customs duty records and third-party information such as bank statements to estimate a taxpayer’s income and liability. Previously, taxpayers had no mechanism to dispute figures captured in these pre-populated returns, leaving some exposed to assessments that overstated what they owed.
Finance and Planning Committee Chairperson Kuria Kimani explained the rationale behind the change during debate in the National Assembly. He said that while leveraging technology for tax administration is necessary, the Revenue Authority must also be obligated to give taxpayers a chance to amend pre-populated returns, so that the authority cannot issue fictitious assessments that taxpayers have no way of correcting.
The reform sits alongside a separate amendment requiring KRA to explain itself in tax avoidance cases. Clause 41 of the Bill, amending Section 18 of the Tax Procedures Act, compels the Commissioner to issue written reasons within thirty days to anyone determined to have entered into a tax avoidance scheme.
KRA has credited its approach with widening the tax base. The authority said its income and expenses validation exercise has been pivotal in bringing previously untaxed individuals into the system, with such taxpayers contributing Sh7.8 billion this year alone.
The push for stronger taxpayer protections extends further. A separate proposal for a new Section 29A in the Tax Procedures Act would require KRA to disclose the data and calculations behind any assessment based on third-party information, and would place the burden on the Commissioner to prove the accuracy of that data in disputes. Kimani has argued that allowing assessments without disclosing the underlying sources would breach basic principles of fairness.
The changes come as KRA rolls out eTIMS linked validation of income and expenses, a process that began checking declared figures against electronic tax invoices, bank data and customs records from January 2026. The Finance Bill 2026 remains under parliamentary review, and provisions may still be revised before final enactment.
