The Kenya Revenue Authority has granted 209 billion Shillings in waivers for accrued interests and penalties to at least 200,000 taxpayers as part of a tax pardon scheme.
The initiative, outlined in the Finance Act 2023, started on September 1, 2023, and is set to conclude on June 30, 2024.
According to the latest update from the tax authority, taxpayers have benefited from the tax waivers after paying principal taxes amounting to Sh14.5 billion by February 20.
The amnesty program specifically targets taxpayers who had accrued penalties and interests on unpaid taxes until December 31, 2022. To qualify for the waiver, taxpayers must make full payments of the principal taxes owed to the KRA by the stipulated deadline.
The KRA emphasized the importance of Alternative Dispute Resolution (ADR) for taxpayers, enabling them to leverage the ongoing tax amnesty. It noted that provisions regarding the waiver of penalties and interest and the abandonment of taxes were repealed by the Finance Act 2023.
The pressure on the KRA to boost revenue collections is evident, especially as the government fell short of its tax revenue targets in the six months ending December 2023.
The shortfall amounted to Sh186.2 billion, with ordinary revenue recording a 14.6 percent deficit against the budgeted plans. The Treasury had aimed to collect Sh1.27 trillion in ordinary revenue during the period but only managed Sh1.088 trillion.
All tax heads experienced shortfalls compared to their targets set during the budget formulation, as indicated in the second quarterly economic and budget review report.