How to handle KRA Assesments
Section 73(3) of Kenya’s Income Tax Act (Cap 470) empowers the Commissioner of the Kenya Revenue Authority (KRA) to issue what are commonly known as “Estimated Assessments” where a taxpayer fails to submit a tax return for a given year of income. 
These assessments are presumed determinations of tax liability and are enforceable unless the taxpayer takes formal action. To have such an assessment vacated or amended, the taxpayer must:
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File a valid objection; and
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Submit the relevant tax return for that year of income.
Section 73(2) further clarifies that while the Commissioner may accept a return, they are not legally bound to do so. Thus, the mere act of filing a return after an assessment does not guarantee acceptance—further legal procedures apply.
How the Commissioner Treats Late Returns
a) If No Valid Objection Accompanies the Return
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The Commissioner may ignore the return if the declared income is the same or lower than the estimated amount.
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If the return reports higher income than the assessment, an additional assessment may be issued under Section 77.
b) If a Valid Objection Is Submitted with the Return
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The objection must comply with Section 84 to be valid.
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Upon validation, the Commissioner acknowledges receipt via Form IT 13 and proceeds according to Section 85.
Section 85: The Commissioner’s Options After Receiving Form IT 13
Once acknowledged, the Commissioner has the following three options:
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Accept the return as filed and process it accordingly.
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Accept the return with adjustments (with or without taxpayer agreement). If there’s disagreement, the Commissioner must serve Form IT 23A to inform the taxpayer of their right to appeal.
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Reject the return completely, in which case the Commissioner is not obligated to process it. The taxpayer is then issued Form IT 23, along with a notification of their right to appeal.
For professional help in responding to KRA assessments, objections, or tribunal appeals, contact
Dennykins & Associates – Tax Dispute Experts in Kenya
