THE SIMPLIFIEDPAYE RETURN

June 3, 2025

By CPA Churchill Ooko

Accountant at 3A CPA LLP

On the 29th April 2025, through a virtual webinar by ICPAK and KRA, KRA Commissioner unveiled plans to simplify PAYE return fillings in line with their 9th Corporate Plans, which outlines the strategic objective to streamline the tax process and align it with best practices.

Why the changes?

To enhance user experience
To reduce compliance cost
To align with best practice
To improve convenience
To enhance compliance

The changes would target integration of:

Offline Excel Return (Which is currently used for filling)
Web Based Return
Mobile App for Small and Medium -sized enterprises (SMEs)
Filing through Application Programming Interface (API) service through employers own system rather than iTax (for larger companies).

These changes will take place in three phases;

Phase one will be effective May 2025
- Phase two will be effective August 2025, it will roll out the Web Based Return
- Phase three willbe implemented on June 2026

Phase one will pilot for May 2025 payroll for the private sector.

Phase one: simplification of offline excel return

The number of sheets to be filed will be reduced to only five sheets with the others merged within the sheets therein or eliminated.

Sheet A -Basic information (maintained)

Sheet B– Employee details (merged with former sheets C and M)

Sheet C-Lump sum payment details (merged with former sheets F, G, H and I)

Sheet D– Fringe benefits tax details (maintained)

Sheet E– Tax due

Changes and modifications on sheet B (employment details)

A new column (E) is introduced for persons with disability and will have a YES/NO option
A new column (F) is introduced for exemption certificate numbers if YES is selected in column (E)
Column (G) is for Total Cash Pay, KRA will no longer need a breakdown of the different allowances
Non-Cash Benefits maintained due to difficulty in merging the benefits

In summary, the simplification of PAYE returns marks a significant step forward in improving payroll compliance and operational efficiency for employers. By streamlining reporting obligations, integrating real-time data submissions and leveraging digital payroll solutions, businesses can minimise errors, reduce administrative costs and ensure timely and accurate tax remittance.

By Churchill Ooko

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CPA Adan A. Jarso

CPA Adan Abdo Jarso is a distinguished finance professional with extensive expertise in audit, financial management, tax, and strategic advisory services. As a Partner at 3A CPA LLP, he has been instrumental in overseeing the firm’s operations, ensuring compliance with international auditing standards, and delivering high-quality advisory solutions to a diverse clientele.

With a solid academic background, CPA Adan is currently a Ph.D. (Finance) candidate at the University of Nairobi. He holds an MBA in Finance from Kenyatta University and a First-Class Honours degree in Business Management from Moi University. Additionally, CPA Adan is a Certified Public Accountant (CPA-K) and a Certified Fraud Examiner (CFE). His commitment to professional excellence is also reflected in his membership with the Association of Certified Fraud Examiners (ACFE, US) and the Kenya Institute of Management (MKIM).

In December 2022, CPA Adan was awarded a Certificate of Commendation by the Institute of Certified Public Accountants of Kenya (ICPAK), in recognition of his exceptional contributions to the accounting profession.

Throughout his career, CPA Adan has held key leadership roles in audit, financial management, and taxation, including positions as Chief Accountant, Audit Manager, and Senior Auditor at reputable firms. His extensive experience spans external audits, tax audits, risk management, financial advisory services, and corporate and individual tax planning. His expertise has solidified his reputation as a trusted advisor in the industry.

Beyond his professional practice, CPA Adan has contributed to various boards and committees, including the ICPAK Audit and Risk Committee and the Kenya National Entrepreneurs Trust Fund, where he chaired the Audit and Risk Committee. His dedication to good governance and financial integrity continues to leave a lasting impact on the business community.

CPA Abubakar M. Ali.

CPA Abubakar Mohamed Ali is a seasoned financial expert with over 15 years of experience in audit, tax, and financial advisory services. He has held key leadership roles in both the private and public sectors, demonstrating strong expertise in financial management, compliance, and risk assessment.

As a Partner at 3A CPA LLP, CPA Abubakar leads audit planning, risk assessments, and compliance reviews, playing a crucial role in strengthening financial integrity. Previously, he served at the National Treasury’s Internal Audit Department, overseeing financial audits and regulatory compliance for government entities. His hands-on experience in both public and private sector financial operations has equipped him with a deep understanding of regulatory frameworks, internal controls, and risk mitigation strategies.

Recognized for his excellence in taxation, financial accounting, and auditing, CPA Abubakar has received multiple accolades from KASNEB. His commitment to transparency, efficiency, and continuous learning ensures he remains a trusted advisor in the financial sector, driving success for businesses and organizations alike.

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