KRA targets Sh50 billion from the Tax Amnesty Programme

The Kenya Revenue Authority is anticipating to collect Sh50 billion from the 10-month Tax Amnesty Programme, which was launched in September.

Treasury Cabinet Secretary Prof Njuguna Ndung’u said besides being a means of giving back to society, the tax amnesty programme is one of the government’s fiscal policy measures aimed at cushioning Kenyans and strengthening economic resilience during the adverse domestic and external headwinds being experienced globally.

In the programme, KRA asked taxpayers who have accrued interests up to December 2022 to pay up the principal taxes due, and the taxman will write off the penalties and interests accrued.

“Tax amnesties are projected to bring in additional revenue as taxpayers voluntarily report and pay taxes that may never be collected by the Government,” said Prof Ndung’u.

“The amnesty programme is expected to improve tax compliance as tax administrations learn from taxpayers’ previous behaviours, thereby allowing them to plan better.”

The Finance Act, of 2023 introduced Section 37E to the Tax Procedures Act, of 2015 which has granted a tax amnesty on penalties and interest on tax debt for periods up to 31st December 2022.

The Tax amnesty commenced on September 1, 2023, and shall run up to June 30, 2024.

A person qualifies for the tax amnesty on penalties and interest where the person has no principal taxes owed but there are penalties and interest for periods up to December 31, 2022.

One also qualifies when one fully pays any outstanding principal taxes accrued up to December 31, 2022, by 30th June 2024.

The CS said that the Government is cognizant of the current changing environment and will continue to support private businesses' capacity to adapt through reforms.

“This will create business value for entrepreneurs to promote economic growth,” he said.

Kenya Revenue Authority Commissioner General Humphrey Wattanga General said during this year’s Taxpayers’ Month, KRA has lined up a myriad of activities aimed at giving back to society and honouring compliant taxpayers.

“In the spirit of giving back to taxpayers, we are calling on those who have accrued interests up to December 2022 to take advantage of our Tax Amnesty programme and pay up the principal taxes due, so that we can write off the penalties and interests accrued,” said Wattanga.

He said that KRA is constantly determined to enhance voluntary compliance among taxpayers and urged taxpayers to embrace the program before it closes on June 30, 2024.

“All taxpayers are welcome to apply for waiver; for those who did not file their returns and accrued penalties for non-filing, they automatically qualify and should go ahead and file their returns,” he said.

“Tax compliance is the keystone for realizing our vision of economic growth, sustainable development and shared prosperity, essential for advancing the Bottom-up Economic Transformation Agenda (BETA).”

In the financial year 2022/2023, Wattanga said that KRA collected Shs2.166 trillion adding that the authority was on course to collect and surpass the Sh2.768 trillion revenue target this financial year.

He added that in their bid to enhance voluntary compliance, KRA has introduced initiatives such as the Electronic Tax Invoice Management System (eTIMS), an innovation geared towards automating VAT filings.

eTIMs he said offers several advantages to taxpayers. It reduces the cost of compliance for VAT-registered businesses, enables real-time invoice transmission, ensures accuracy in tax invoice declarations, and facilitates reconciliation between filed returns and payments.

The software he said has helped minimise VAT fraud and increased tax revenue.

“Moreover, taxpayers also benefit from simplified return filing through pre-populated VAT returns. Since its inception in February 2023, a total of 95,732 VAT registered taxpayers had on-boarded eTIMs by Financial Year 2022/23,” he said.