Until 30th June 2024, KRA is running a tax amnesty effected 1st September 2023 under the Finance Act 2023.
Ongoing until 30th June 2024
Fundamentally, the Kenyan tax system operated by the Kenya Revenue Authority relies on voluntary compliance by the taxpayer.
Businesses and individuals are expected to conduct a voluntary tax assessment, declare their income and pay the corresponding tax liability.
This element of voluntary assessment attracts a higher susceptibility to tax avoidance and tax evasion and when caught the taxpayer has to bear applicable penalties and interests. Even without intention to cheat the system using any of these two ways, taxpayers have found their accounts with penalties for many other reasons.
Undeniably, tax penalties and interests are a huge financial burden, directly and indirectly. The tax authority award tax compliance certificates only to taxpayers who have settled all their tax obligations.
A tax compliance certificate is such an important document, lack of it could bar you from employment and business opportunities.
If you have penalties and interests, the ongoing tax amnesty is for you.
Applying for tax Amnesty
Qualifying penalties and interests are those accrued for tax debts for up to 31st December 2022. This means that penalties and interests accrued as a result of unfiled & unpaid taxes for any tax period starting 1st January 2023 will not qualify for amnesty.
Note: Only penalties and interests will be forgiven. You have to have settled the principal tax.
But just incase you have not settled the tax due, the application process will allow you to request to present a payment plan on the condition that, the entire tax debt is paid before 30th June 2024 failure to which it will be a violation of the agreement from you end and hence may affect your eligibility for the amnesty.
The payment plan should therefore indicate how you intend to pay the principal tax, may be say you will pay certain amount per month.
Be keen to note also that there are some instances where the amnesty will not be granted. For instance, if the penalties and interests under question is attached to an ongoing tax case.
Where you have doubts or are unsure, we strongly suggest that you seek professional assistance.
We offer tax consultancy services in issues related to VAT, Rental Income Tax, TOT, Corporation tax, Individual income tax, Custom Duty, and any other related taxes in Kenya.
