Eligibility, Application Guide & iTax Step-by-Step
Kenya’s Tax Procedures (Amendment) Act 2024 introduces a significant opportunity for taxpayers to regularize their tax status with the Kenya Revenue Authority (KRA). This tax amnesty waives interest, penalties, and fines on outstanding tax debts up to 31 December 2023, provided the principal tax is paid in full by 30 June 2025. In this guide, we will delve into what the tax amnesty entails, who qualifies, how to apply, and why taking advantage of this amnesty could be beneficial.
What is Tax Amnesty?
Tax amnesty refers to a government initiative that provides relief to taxpayers by waiving penalties, interest, or fines associated with unpaid taxes. This creates an opportunity for individuals and businesses to settle their outstanding tax obligations without the burden of punitive charges.
The 2024-2025 tax amnesty applies to:
- Automatic Waivers: For taxpayers with no principal tax liabilities but accumulated penalties and interest up to 31 December 2023.
- Application-Based Waivers: For taxpayers with principal tax arrears for the period ending 31 December 2023, provided they submit an application and payment plan via iTax and settle the principal tax by 30 June 2025.
Key Features of Kenya’s Tax Amnesty 2024-2025
- Scope: Covers all tax heads, including Income Tax, VAT, PAYE, Excise Duty, and Capital Gains Tax.
- Period Covered: Tax liabilities up to 31 December 2023.
- Deadline: Applications and payments must be completed by 30 June 2025.
- Exclusions: Fines unrelated to tax liabilities, penalties for fraudulent declarations, and taxes arising after 31 December 2023.
Who is Eligible?
The eligibility criteria for Kenya’s tax amnesty are straightforward:
Automatic Waiver Eligibility
Taxpayers who have no outstanding principal tax liabilities as of 31 December 2023 but have accumulated penalties, fines, or interest are automatically granted the waiver. No application is necessary.
Application-Based Amnesty
Taxpayers with outstanding principal tax liabilities for the period up to 31 December 2023 must:
- Submit an Amnesty Application: Log into iTax and provide details of the tax liabilities.
- Propose a Payment Plan: Outline how the principal tax will be paid by 30 June 2025.
- Settle Principal Tax: Ensure the full amount is paid within the stipulated timeline.
Special Considerations
Taxpayers with disputes under review (objections, appeals, or court cases) must resolve these disputes before qualifying for the amnesty. Self-assessed or amended assessments for eligible periods also qualify, provided the principal tax is settled.
How to Apply for Tax Amnesty via iTax
The application process is designed to be straightforward and user-friendly. Here are the steps:
- Log into iTax: Access your account on the KRA iTax portal.
- Navigate to the Amnesty Application Form: Go to the “Debt and Enforcement” section and select “Amnesty Application.”
- Fill in Section A: Select the tax head(s) and periods for which you are applying.
- Fill in Section B: Propose a payment plan detailing installments and frequency, ensuring full payment by 30 June 2025.
- Review and Accept Terms: Agree to the terms and conditions outlined by KRA.
- Submit Application: Once submitted, iTax will generate an acknowledgment receipt and payment plan.
- Make Payments: Generate a payment slip and remit payments via bank transfer or mobile money (Paybill 222222).
Additionally, once the principal tax is paid in full, the system will automatically waive the interest and penalties and issue an Amnesty Certificate.
Benefits of the Tax Amnesty
- Significant Financial Relief: By waiving interest and penalties, taxpayers save substantial amounts.
- Enhanced Compliance: A clean tax record improves access to tenders, government contracts, and other business opportunities requiring a Tax Compliance Certificate.
- Reduced Enforcement Actions: Clearing tax debts prevents future audits, legal actions, and asset seizures.
- Ease of Doing Business: Companies and individuals can operate with peace of mind, free from looming tax issues.
What Happens If You Miss the Deadline?
Failure to pay the principal tax by 30 June 2025 results in the reapplication of penalties, interest, and enforcement measures by KRA. It is crucial to act promptly to avoid these consequences.
Tips for a Smooth Application Process
- Evaluate Tax Status Early: Review your tax liabilities through iTax to ensure accurate reporting.
- Engage Tax Professionals: Seek advice from tax consultants for proper guidance.
- Plan Payments Strategically: Ensure your proposed installment plan is realistic and achievable.
- Resolve Disputes Quickly: Utilize mechanisms like Alternative Dispute Resolution (ADR) to expedite conflict resolution.
- Act Before the Deadline: Avoid last-minute applications that may lead to errors or delays.
Read: How to Apply for KRA Penalty and Interest Waiver via iTax in 2025
Conclusion
Kenya’s 2024-2025 tax amnesty is a golden opportunity for taxpayers to regularize their tax affairs while enjoying significant financial relief. By settling outstanding principal tax liabilities and leveraging the waiver of penalties and interest, individuals and businesses can improve their compliance status, avoid enforcement actions, and secure a brighter financial future.
Take the first step today by logging into iTax and submitting your application before the 30 June 2025 deadline. Don’t miss this chance to clear your tax slate and contribute to Kenya’s economic growth.
FAQs
What is the deadline for the 2024-2025 tax amnesty application?
The deadline for applications and full payment of principal tax is 30 June 2025.
Can I apply for amnesty if I have a pending tax dispute?
Yes, but you must resolve the dispute through mechanisms like ADR, court rulings, or agreements with KRA before qualifying for the amnesty.
What happens if I fail to pay the principal tax by the deadline?
Failure to pay by 30 June 2025 will result in the reinstatement of penalties and interest on your tax liabilities.
Is the amnesty applicable to all types of taxes?
Yes, it covers all tax heads, including Income Tax, VAT, PAYE, Excise Duty, and Capital Gains Tax.
Do I need to apply for an automatic waiver?
No, automatic waivers are granted to taxpayers with no outstanding principal tax liabilities as of 31 December 2023. No application is required.
Can businesses benefit from the tax amnesty?
Yes, both individuals and businesses with outstanding tax liabilities as of 31 December 2023 are eligible to apply.
How do I know if my application has been approved?
You will receive an acknowledgment receipt and an Amnesty Certificate upon full payment of the principal tax.
