If you’ve incurred tax penalties or interest due to late filing or payment, you’re not alone. Fortunately, the Kenya Revenue Authority (KRA) provides a waiver process to help you reduce or eliminate these charges. This guide covers everything you need to know about applying for a KRA waiver, including eligibility, the application process, and tips to increase your chances of approval.
What is a KRA Waiver?
A KRA waiver allows taxpayers to request the removal of penalties and interest accrued due to late filing or payment of taxes. This waiver applies exclusively to penalties and interest; the principal tax amount must be fully paid before submitting your application.
The waiver is an essential tool for taxpayers who face financial constraints or unforeseen circumstances that hinder compliance. By applying, you demonstrate your commitment to fulfilling your tax obligations while seeking relief from additional charges.
Eligibility for KRA Waiver
To qualify for a KRA penalty and interest waiver, you must meet the following criteria:
- Payment of Principal Tax: All outstanding principal tax amounts must be fully settled.
- Tax Compliance: You must be compliant with all other tax obligations, including timely filing and payment of taxes.
- Valid Justification: Provide a reasonable explanation for the delay, supported by relevant documents.
- Exclusions: Penalties and interest arising from fraud or tax evasion are not eligible for waiver.
Step-by-Step Guide to Applying for a KRA Waiver
The KRA waiver application process is conducted online through the iTax portal. Here are the steps to follow:
1. Log in to iTax
- Visit the iTax portal.
- Enter your KRA PIN and password to log in.
2. Access the Waiver Application Section
- Navigate to the “Debt and Enforcement” tab.
- Select “Apply for Waiver of Penalties and Interests.”
3. Complete the Application Form
- Provide your personal and tax details.
- Specify the tax obligation and period for which you’re requesting a waiver.
- Upload a waiver letter explaining your reasons for the request.
- Attach supporting documents such as medical records, financial statements, or other relevant documentation.
4. Submit the Application
- Review all the information to ensure accuracy.
- Click “Submit” to send your application.
5. Download Acknowledgment Receipt
- After submission, download and save the acknowledgment receipt for your records.
How to Write a Waiver Letter
Your waiver letter is a crucial component of the application. It should clearly articulate the reasons for your request. Below is a sample format:
[Your Name]
[Your KRA PIN]
[Your Address]
[Date]
To:
The Commissioner
Kenya Revenue Authority
Subject: Application for Waiver of Penalties and Interest
Dear Sir/Madam,
I am writing to request a waiver of penalties and interest imposed for [specific tax period]. Due to [reason for non-compliance, e.g., illness, financial hardship], I was unable to comply with the tax obligations on time.
I have since settled the principal tax amount and am now compliant with all tax requirements. I kindly request your consideration to waive the penalties and interest accrued.
Attached are supporting documents to substantiate my request.
Thank you for your understanding.
Sincerely,
[Your Name] Supporting Documents to Attach
Your supporting documents should validate the reasons outlined in your waiver letter. Commonly required documents include:
- Medical Records: For cases of illness or hospitalization.
- Financial Statements: Demonstrating financial hardship.
- Employment Records: If job loss affected compliance.
- Death Certificates: In cases where bereavement impacted compliance.
Ensure all documents are clear, legible, and directly relevant to your case.
What to Expect After Submission
Once you submit your waiver application:
- Acknowledgment: You will receive an acknowledgment receipt.
- Processing Time: KRA typically processes waiver applications within 90 days.
- Communication: KRA may contact you via email or SMS for additional information or documentation.
- Decision Notification: You will be notified of the decision via email or letter.
If your application is approved, the penalties and interest will be waived. If partially approved or rejected, you may be required to pay the remaining amounts.
Read: Simplifying Tax Compliance: KRA Automates eTIMS Registration
Tax Amnesty Programme (2025)
In addition to individual waiver applications, KRA has introduced a Tax Amnesty Programme running until 30th June 2025. This initiative provides relief for taxpayers with outstanding penalties and interest accrued up to 31st December 2023.
Key Points:
- Automatic Waiver: Taxpayers who settled their principal taxes by 31st December 2023 automatically qualify for a waiver on related penalties and interest.
- Application Required: Taxpayers with unpaid principal taxes must apply via iTax and submit a payment plan to settle the amount by 30th June 2025.
- Exclusions: Tax debts arising from 1st January 2024 onwards are not covered under this programme.
Consequences of Not Applying
Failing to address outstanding penalties and interest can lead to:
- Accumulated Debts: Penalties and interest will continue to accrue.
- Credit Bureau Listing: Non-payment may result in negative credit reporting.
- Legal Action: KRA may initiate enforcement actions to recover debts.
Conclusion
Applying for a KRA penalty and interest waiver can significantly ease your tax burden and ensure compliance. Ensure you meet all eligibility criteria, provide a compelling waiver letter, and submit all necessary documents promptly. For further assistance, contact the KRA Contact Centre:
- Phone: 020 4 999 999 or 0711 099 999
- Email: callcentre@kra.go.ke
Stay proactive, take control of your tax obligations, and make the most of the relief options available to you.
