Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

November 1, 2023
2023-1816

Kenya Revenue Authority issues guidelines on tax amnesty application process

  • Guidelines are now available addressing how the Kenya Revenue Authority will implement a tax amnesty program that recently became law.
  • The tax amnesty program is available until 30 June 2024.
  • Taxpayers should determine whether they qualify for the program.

The Kenyan Revenue Authority (KRA) has issued guidelines on the implementation of a tax amnesty program introduced under the Kenyan Finance Act 2023. The Act introduced Section 37E into the Tax Procedures Act, which requires the KRA to refrain from recovering historical outstanding penalties and interest.

The amnesty applies where the principal tax has been settled under the following circumstances:

  1. Full amnesty on penalties and interest accrued for periods up to 31 December 2022 if principal tax was fully paid by 31 December 2022
  2. Amnesty upon application if the taxpayer settles the outstanding principal tax by 30 June 2024, for historical periods up to 31 December 2022

Implementation

The KRA's implementation guidelines for implementing the tax amnesty program are detailed below.

a. Eligibility

Category 1 taxpayers

Category 1 taxpayers have settled the principal tax on their historical tax obligations of up to 31 December 2022. These taxpayers are entitled to an automatic amnesty of any accrued penalties and interest.

Category 2 taxpayers

These are taxpayers who have outstanding principal tax for historical periods up to 31 December 2022. They are required to apply for the amnesty coupled by a payment plan for the outstanding principal tax. The outstanding principal tax must be settled by 30 June 2024.

However, penalties and interest are excluded from the amnesty process if they:

  1. Arise from tax avoidance under section 85 of the Tax Procedures Act
  2. Are related to tax liabilities of tax periods after 31 December 2022

b. Tax amnesty process

The amnesty application process may be accessed either by submitting a hardcopy (paper) application or and by utilizing the online tax return filing system, i-Tax. The taxpayer is required to assess existing liabilities, namely, principal tax, penalties and interest for historical periods up to 31 December 2022.

Where a taxpayer has an outstanding principal tax, they should ensure full payment of the principal tax by 30 June 2024.

c. What happens when one is already enrolled for a Voluntary Tax Disclosure Programme (VTDP)

If a taxpayer had already kickstarted a VTDP process that has not been fully finalized, the taxpayer is required to liaise with the KRA if they had already paid existing principal tax.

d. Timeframe

The amnesty process is active up to 30 June 2024.

Taxpayers are encouraged to take up the amnesty to regularize their historical tax position.

———————————————

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Kenya), Nairobi

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more