Finance Bill 2026: Parliament Shields Taxpayers From Automated KRA Assessments

One important change made during Parliament’s voting on the Finance Bill 2026 concerns how taxpayers deal with income tax returns pre-populated by the Kenya Revenue Authority.
A pre-populated return means KRA prepares your tax return in advance using information it already has. This can include withholding tax certificates, customs records, bank information, eTIMS invoices and other third party data to estimate your income tax liability.

The idea was to make tax filing easier and help KRA catch income that may previously have gone undeclared. But it also created risks: the data KRA uses may be incomplete, wrongly captured or missing important context. A taxpayer could therefore be assessed on figures they did not personally confirm.
That is where the problem was. Taxpayers had limited room to amend liabilities captured in these pre-filled returns, raising the risk of being locked into inflated or incorrect assessments.

Clause 48 of the Finance Bill 2026, which amends Section 75 of the Tax Procedures Act, was therefore adjusted to give taxpayers more control. Under the adopted amendment, KRA must notify a taxpayer when a pre-populated return has been issued. The return must be issued on or before the end of January of each year income, and the taxpayer will have two months to confirm or amend it from the date the pre-populated return is issued by the Commissioner.
The amended clause is meant to protect taxpayers from being charged based on figures they have not reviewed. KRA can still use third party information to prepare tax returns, but the taxpayer must be given a chance to confirm whether the income, expenses and tax due are correct.