Parliament Adds Safeguards to KRA's Pre-Populated Tax Returns, Grants Taxpayers Two-Month Amendment Window

Parliament has amended the Finance Bill 2026 putting in place some essential safeguards protecting taxpayers from getting duped with unfair pre-filled income tax returns by the Kenya Revenue Authority (KRA) - a move aimed at stopping assessments that could make it hard for businesses to stay afloat.

The Pre-Population Framework

The move to pre-populate income tax returns came into effect in January 2026. Essentially, KRA utilizes data from sources like withholding tax certificates, customs duty records and even third-party info like bank statements to figure out what you earn and how much tax you owe. This means taxpayers can no longer just sit back while the KRA sorts it all out - and that they've got to live with whatever the Authority comes up with.

What the Amendment Does

The Finance Bill was at least amended on June 18, 2026, when the Committee of the Whole House session was revised. Essentially, this change will give taxpayers more rights. Now, the KRA has to let you know when it sends you a pre-filled return by the end of January each year. And - this is the good bit - you've now got two whole months to have a look over the return and correct any mistakes that might have been made.

All of this is because of new rules that were put in place with clause 48 of the Finance Bill 2026 - which just so happened to amend section 75 of the Tax Procedures Act. And according to the new rules, KRA will have to send you a notice when they issue a pre-filled return - then you'll have two months to either confirm or fix things with the return.

Stopping Unfair Assessments

The tax committe had a clear view of things and were keen to confirm that the change protects taxpayers from getting unfairly slapped with more taxes to pay. As the chair of the Finance and Planning Committee, Kuria Kimani, put it " we want to make sure the Authority has to give taxpayers a chance to sort out any mistakes before they're slapped with a fake assessment they can't correct".

eTIMS is the Key

It's worth noting that all this is was made easier thanks to a change that made it law for businesses to issue eTIMS invoices under Section 23A of the Tax Procedures Act. This basically means that when it comes to deducting expenses, everyone's got to go digital.

And How Much Will it Bring In?

The good news for KRA is that things seem to be working. KRA's Commissioner for Micro and Small Taxpayers, George Obell, said that because of the new system, they've seen a massive 97,000 taxpayers who've never paid a shilling before come forward to pay Sh7.8 billion.

Additional Taxpayer Protection

Parliament also amended the Finance Bill 2026 to require KRA to provide written explanations when determining that taxpayers engaged in tax avoidance schemes. Under Clause 41, which amends Section 18 of the Tax Procedures Act, "The Commissioner shall issue a person determined to have entered into or carried out a tax avoidance scheme written reasons for the determination made within thirty days of the determination."