All Transactions That Require a KRA PIN

For many Kenyans, a KRA PIN is something they only think about when applying for a job or filing taxes. However, in reality, the PIN is needed for everyday financial and legal transactions.

From buying land and registering a business to importing goods or even applying for a HELB loan, a KRA PIN is often the one requirement that determines whether a transaction can move forward or not.

What Is a KRA PIN?

A KRA PIN is a personal identification number issued by the Kenya Revenue Authority (KRA) to individuals and entities for tax and identification purposes.

It is used when dealing with government agencies, financial institutions or service providers.

A PIN is not limited to individuals, and it is also issued to businesses, companies, trusts, clubs and organisations. Importantly, each person or entity is issued only one PIN.

You are required to have a KRA PIN if you are employed, running a business, earning rental income, want to apply for a HELB loan, or intend to carry out any major financial or legal transaction in Kenya.

Transactions That Require a KRA PIN

1. Opening a Bank Account

When you open a bank account as an adult, you will be required to provide personal details, including your KRA PIN.

2. Employment 

When you look for employment and are successful, one of the details your employers will need you to provide is your KRA PIN. This is done to allow the employer to remit the necessary taxes deducted from your salary to KRA, which in turn credits the payments to an individual's PIN. 

This is therefore useful when one is filing taxes. Some of the taxes deducted from one's salary include Pay As You Earn (PAYE) and Housing Levy.

3. Land and Property Transactions

If you are buying, selling, or transferring land, a PIN is required for registration of title deeds, stamping of legal documents, and payment of land rent to the county government.

You will need a PIN when seeking approval of building plans from the county government. When paying for water connections, you are also required to have a PIN.

Without a PIN, you cannot complete property transactions through government offices.

4. Business Permits

When you start a business, the county government require you to apply for a permit, which is renewed annually at different rates depending on the nature of the business and the county. 

When making these payments, you are required to have a KRA PIN.

5. Motor Vehicle Transactions

A KRA PIN is required when registering a motor vehicle in your name. The PIN is also needed when transferring ownership of a motor vehicle.

Most importantly, whether you are buying a car locally or importing one, you cannot complete the process without a PIN.

When applying for a Driving Licence or renewing one, you are required to have a KRA PIN.

6.  Business Registration and Operations

If you want to start a business or company, a PIN is mandatory for the registration of business names. 

7. Tax Registration (Including VAT)

Businesses that are required to collect and remit Value Added Tax (VAT) to KRA cannot operate without a PIN.

The PIN is also necessary for filing tax returns.

In the latest proposal by KRA, VAT registration will be mandatory for all businesses as it seeks to remove the current Ksh5 million annual turnover threshold. 

If adopted, even small traders such as shops, wines and spirits outlets, and service providers will be required to charge 16% VAT on applicable goods and services and remit it monthly.

8. Insurance Services

Insurance companies require a PIN when underwriting policies and processing claims. This ensures that financial transactions are linked to a registered taxpayer.

9.  Importation of Goods

If you import goods into Kenya, a PIN is required for customs clearing, forwarding and the processing of import documentation

10. Kenya Power Connections 

When you build a house, and you want to pay a deposit for electricity connection, you will be required to have a KRA PIN.

11.  Government Tenders and Contracts

If you want to supply goods or services to the government, a PIN is required to bid for tenders or sign contracts with government ministries and public institutions

Without a PIN, you cannot participate in public procurement opportunities.

12. HELB Loans Application

Students applying for loans through the Higher Education Loans Board (HELB) are also required to have a PIN.

This has made it a necessity for students joining colleges and universities to get a PIN, even if they are not working.

13. Passport Application

When applying for a passport, those above 18 years are required to provide details of their KRA PIN. In cases of minors, parents provide their KRA PIN instead.

14. Investments

The majority of fund managers require an investor to provide their KRA PIN when they want to invest in various Collective Investment Schemes (CIS), such as Money Market Funds (MMFs) and Special Funds.

Even when buying government securities, you will need to have a KRA PIN, as it is a requirement when opening a CBK DhowCSD Account. Even when buying corporate bonds, you will still need to have a KRA PIN.

Wrapping Up

A KRA PIN is no longer just a tax requirement; it is a vital tool for accessing financial and government services. From buying land and registering a business to accessing electricity and applying for loans, the PIN is required in almost every major transaction.

Notably, KRA recently introduced the “PIN With No Obligation” (PWO) category for Kenyans who have been filing nil returns.

The change is set to benefit students and individuals without taxable income, who were previously required to file annual Nil Returns despite having no earnings. Individuals registered under the PWO category will not be required to file annual returns.