John Mbadi Reveals New Nil Return Tax Filing Deadlines

Treasury Cabinet Secretary John Mbadi reveals new Kenya tax filing deadlines that force millions of citizens to rethink their annual submissions to the Kenya Revenue Authority. Lawmakers heard the plan Thursday as officials scramble to tighten oversight and capture more revenue before the next financial year kicks off.

John Mbadi stood before Parliament and laid out the shift. He wants faster action on certain returns so authorities gain breathing room. Officials currently race the clock each June 30 deadline. That crunch leaves scant opportunity to probe submissions properly.

The Treasury chief explained the pressure. He told lawmakers the existing cutoff squeezes verification before fresh budgets begin. Mbadi proposes revisions to the timelines for filing individual income tax returns to fix that squeeze.

How will the proposed changes hit Kenyans who file nil returns?

Taxpayers with nil returns must now submit them within one month after the tax year ends.

This tight window targets the huge group of Kenyans who file empty declarations every year. Salaried workers whose income faces full withholding at source get four months after year-end to file. Everyone else sticks with the traditional June 30 cutoff. Mbadi believes the staggered approach gives Kenya Revenue Authority teams real time to dig into data and spot issues early.

He addressed the legislators with clear urgency. The moves form part of a broader push to seal revenue leaks and widen the tax net across the country. Mbadi wants every shilling that belongs in public coffers to land there.

Lawmakers listened closely as he turned to offshore deals. Mbadi noted that gains from asset transfers escape tax when routed through foreign setups. He told Parliament that currently gains arising from offshore transfers where the value of the transferred shares derives from assets located in Kenya face no tax.

The proposal closes that gap completely. Any profit from Kenyan assets will attract tax no matter where the paperwork happens or where owners live. This strikes at structures that previously let big transactions slip away untouched.

Companies that hoard profits also face new heat. Mbadi highlighted how some firms drag their feet on payouts. He said when companies make profits, those profits should find their way back to shareholders within a reasonable time. He pointed out that currently some companies have held back profits indefinitely simply to defer paying dividend tax.

To counter the tactic, the budget introduces a 60 per cent minimum deemed dividend distribution on undistributed income. Boards must now think twice before parking cash forever for tax reasons. Shareholders could see more regular payouts as a result.

The amendments clarify royalties and management fees. These updates aim to remove doubt and stop money from vanishing through unclear definitions.

Authorities expect the changes to modernise rules that have lagged behind Kenya’s booming online economy.

Withholding tax on bet winnings

The gambling sector drew sharp focus too. Mbadi observed that gambling activities have grown significantly through digital platforms in recent years. He declared that winnings from gambling are income, and like any other income, they should be taxed.

Officials plan a withholding tax on winnings from betting lotteries and prize competitions. The step treats these earnings the same as salaries or business profits. Players will notice deductions at source once the rules take effect.

Kenya continues to expand its digital infrastructure from Mombasa ports to Eldoret markets, and the proposals reflect that growth.

Ordinary citizens will feel these shifts in coming months. Someone filing a nil return after December 31 must act by the end of January. Others gain extra weeks but shoulder stricter scrutiny. The Kenya Revenue Authority gains tools to verify faster and chase discrepancies harder.

Lawmakers pressed for details during the session. Mbadi answered each point with specifics on dates and thresholds. He reiterated the goal to build a fairer system where loopholes shrink and compliance rises.

These proposals now head into further debate. If passed, they reshape how Kenyans interact with tax authorities, starting with the 2026 income year.