The Kenya Revenue Authority has abolished the Nil Returns filing system and replaced it with a new category known as “PIN with No Obligation” (PWO). The move targets individuals who hold a PIN but do not earn taxable income.
The tax agency said it updated the iTax system to allow both resident and non-resident individuals to register under the new category. It said the change aims to improve the integrity of the taxpayer database and simplify compliance requirements.
Previously, taxpayers without income were required to file Nil Returns annually to remain compliant. Many users described the process as repetitive and unnecessary, especially for those not engaged in economic activity.
Under the new system, individuals under the PWO category will not file annual returns. The system now treats them as compliant without requiring yearly submissions.
KRA said the category will mainly apply to students and individuals who require a PIN for non-income activities such as accessing education loans or carrying out non-taxable transactions.
However, the authority warned that taxpayers must update their status once they begin earning income. They will then be required to file annual tax returns immediately.
KRA also noted that failure to comply with filing requirements may attract penalties. Individuals may pay a penalty of Ksh2,000 or 5 per cent of the tax due, whichever is higher. Companies face higher penalties.
The authority said taxpayers already registered under the old system will transition gradually as system upgrades continue. Applicants seeking PWO status must apply through the iTax portal using a valid national ID.
KRA also reminded Kenyans to file their 2026 income tax returns by June 30 to avoid penalties, amid ongoing enforcement against non-compliant taxpayers.
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