Kenya Prolongs Tax Amnesty Programme to Mid-2025, Expands Coverage

Kenya Prolongs Tax Amnesty Programme to Mid-2025, Expands Coverage. In a strategic move to bolster tax compliance, Kenya has extended its tax amnesty initiative by six months, now concluding on 30 June 2025.

This extension, effective from 27 December 2024, also broadens the amnesty’s scope to include tax periods ending on 31 December 2023.

Key Details of the Extended Amnesty

• Automatic Waiver: Taxpayers who settled their principal tax liabilities by 31 December 2023 automatically qualify for a waiver on accrued penalties and interest.

• Application Process: Those who have not cleared their principal taxes by the specified date can apply to the Kenya Revenue Authority (KRA) for amnesty.
• Applicants must propose a payment plan and fulfill the following conditions:

It’s crucial to note that any principal tax remaining unpaid after 30 June 2025 will be subject to the applicable penalties and interest.

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Background

Initially introduced in September 2023 through the Finance Act 2023, Kenya’s tax amnesty program aimed to encourage taxpayers to address historical tax discrepancies by offering waivers on related penalties and interest.

The original amnesty covered tax periods up to 31 December 2022 and required payment of outstanding principal taxes by 30 June 2024.

However, concerns arose that the initial timeframe was insufficient for taxpayers to comply fully. The recent extension addresses these concerns by providing additional time and expanding the covered tax period.

Implications

This extended amnesty offers businesses and individual taxpayers a valuable opportunity to rectify past tax discrepancies without the burden of penalties and interest.

By settling outstanding principal taxes by the new deadline, taxpayers can achieve compliance and avoid future financial liabilities.

Taxpayers are encouraged to review their tax records promptly, apply for the amnesty if necessary, and ensure all principal taxes are paid by 30 June 2025 to benefit from this initiative.