3 taxes, 3 obligations. The guide that saves you a KES 100,000 fine

📋 The 3 taxes to file (no mistakes)

PAYE (Pay As You Earn) – File and pay by the 9th of each month. 2026 rates: 10% on the first KES 24,000, 25% from 24,001 to 32,333 KES, 30% from 32,334 to 500,000 KES, 32.5% from 500,001 to 800,000 KES, and 35% above . Don't forget: SHIF (2.75% of gross salary), NSSF (up to KES 6,480), and Affordable Housing Levy (1.5% employer + 1.5% employee) are now deducted before PAYE calculation . Late? The penalty is KES 10,000 or 25% of the tax due, whichever is higher, plus 1% interest per month .

VAT (Value Added Tax) – File and pay by the 20th of the following month. The standard rate is 16%. Since March 2026, KRA is pushing for zero-threshold VAT registration, even for micro-businesses . If you're registered, you must use eTIMS for all invoices. Failure to file or pay attracts a penalty of KES 10,000 or 5% of the tax due, plus 1% interest per month .

TOT (Turnover Tax) – For businesses with annual turnover between KES 1 million and 25 million . The rate is 1.5% of gross sales, filed and paid by the 20th of each month . Unlike VAT, TOT is a final tax: you cannot deduct expenses . Micro-businesses now benefit from exemptions on PRN and quarterly payments .

🛡️ The 3 non-negotiable obligations

eTIMS mandatory for ALL expenses – Since January 2026, any business expense not backed by an eTIMS invoice is automatically disallowed . "No eTIMS, No Deduction" is the new rule. A carpenter buying timber for KES 100,000 without an eTIMS receipt will have that amount added back to taxable income . Non-use of eTIMS exposes businesses to a minimum penalty of KES 100,000 .

Meeting deadlines – Each tax has its deadline. The 9th for PAYE. The 20th for VAT and TOT. 30 June for annual income tax returns. Late filing costs KES 20,000 or 5% of the tax due for companies, plus 1% interest per month . A KES 100,000 debt ignored for 12 months becomes KES 132,000 minimum .

2026 tax amnesty (don't miss it) – The Finance Act 2026 reintroduced a tax amnesty until 31 December 2026 . KRA waives 100% of penalties, interest, and fines on tax debts incurred before 1 January 2026, provided you pay the principal . A KES 100,000 debt + KES 50,000 in interest becomes KES 100,000 if you pay before December .

Tip: Log into iTax. Check your past returns. If you have arrears, take advantage of the amnesty before 31 December 2026. One hour today could save you tens of thousands of shillings.

Do it now: Check the 2026 tax calendar on the KRA website. Note the next 3 deadlines (PAYE, VAT, TOT). Prepare your declarations in advance. Don't let a date cost you KES 100,000.

Sources: FNJ & Associates – Tax Calendar 2026; Business Daily – eTIMS Penalties 2026; Business Daily – Tax Changes 2026; KRA – Tax Rates 2026; Business Today – Tax Amnesty 2026; Orbitax – Validation Guidance 2026.

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