The government is seeking to extend the Kenya Revenue Authority’s (KRA) Tax Amnesty Programme through the Tax Procedures (Amendment) Bill, 2024, with the aim of broadening the tax base by bringing more Kenyans into compliance.
This Bill proposes extending the tax amnesty period by an additional year, from June 30, 2024, to June 30, 2025. This extension would allow more taxpayers to benefit from the amnesty, while also enabling the government to collect outstanding principal taxes during this extended period.
A key feature of the proposal is the introduction of a tax recovery relief provision, which empowers the Cabinet Secretary for Treasury to grant relief when recovering taxes proves to be impossible, excessively difficult, costly, or unfair. In such cases, the Commissioner would refer the matter to the Cabinet Secretary, who could then authorize either partial or full relief.
The Bill also stipulates that the Cabinet Secretary must publicly disclose the names of taxpayers granted relief and the reasons for such decisions every four months in the Gazette. These notices would then be submitted to the National Assembly for approval or potential annulment.
According to a public notice, the Bill offers the government an opportunity to amend its provisions to extend the amnesty to cover taxes accrued after December 2022. This proposed extension comes in response to pressure from small traders and lobby groups advocating for the continuation of the successful amnesty program.
The tax amnesty program was initially introduced through the Finance Act of 2023, allowing taxpayers to apply for amnesty on penalties and interest related to tax debts incurred up to December 31, 2022. The program ran from September 1, 2023, to June 30, 2024, offering significant relief to those with outstanding tax obligations.
During this period, the KRA collected Kes.43.9 billion from 1,064,667 taxpayers while waiving penalties and interest totaling Kes.507.7 billion, benefiting 3,115,393 individuals. The amnesty program required taxpayers to pay only the principal amount of their outstanding tax debts, though those penalized for tax avoidance were excluded from the program, which allowed only the waiver of interest and penalties.
Unlike the current amnesty program, which is limited to taxes accrued up to December 2022, the proposed tax relief provision by the Cabinet Secretary would cover all taxes, including principal amounts. This relief would require approval from both the Cabinet Secretary and the National Assembly, and the Commissioner would be required to justify the reasons for recommending the relief.
The Bill also proposes a change in the way time is calculated for lodging objections to tax assessments. The new provision would exclude Saturdays, Sundays, and public holidays—termed “excluded days”—from the computation of time limits for lodging objections.
