What happened

The Kenya Revenue Authority (KRA) has issued a public update on the current tax amnesty programme, emphasizing that the final deadline for eligible filings is 31 December 2026. The notice, circulated on the KRA portal and highlighted by local news outlet Kenyans.co.ke, reiterates that taxpayers who settle outstanding tax liabilities, penalties and interest before the cut‑off date will qualify for the amnesty’s reduced rates and waiver of criminal prosecution. The communication also outlines the required documentation, payment channels and the timeline for processing applications, urging businesses and individuals to act promptly to avoid the re‑imposition of standard penalties after the year‑end closure.

Context and background

The tax amnesty was first announced by the Ministry of Finance in early 2024 as part of a broader fiscal consolidation effort. Its primary goal is to bring informal revenue into the formal tax net, reduce the backlog of unresolved cases, and boost cash flow for the government ahead of the upcoming national budget cycle. KRA, the agency responsible for tax collection and enforcement, has been tasked with administering the programme, processing applications, and issuing compliance certificates to qualifying taxpayers. The amnesty offers a discounted rate on unpaid taxes, typically ranging from 20 % to 50 % of the original liability, and eliminates criminal charges for tax evasion, though civil penalties may still apply if the taxpayer fails to meet the stipulated conditions.

Since its launch in March 2024, the amnesty has attracted significant attention from both corporate entities and private individuals. Early reports indicated a surge in filings during the first quarter, as businesses sought to regularise their tax positions before the fiscal year closed. KRA’s internal data, referenced in its periodic updates, shows that a substantial portion of the submissions come from small and medium‑size enterprises (SMEs) operating in the manufacturing, trade and service sectors. These firms often face cash‑flow constraints and view the amnesty as an opportunity to clear historic liabilities at a lower cost, thereby improving their creditworthiness and eligibility for government‑linked contracts.

Compared with what is normal

Historically, Kenya has introduced tax amnesty schemes during periods of fiscal pressure, most notably in 2019 and 2021. Those earlier rounds typically featured a six‑month filing window and a deadline that fell in September or October, giving taxpayers a shorter horizon to prepare. In contrast, the current programme extends the deadline to the end of December, aligning it with the calendar year and providing a longer runway for compliance. The extended timeline also coincides with the annual tax filing season, which traditionally peaks between July and October, meaning that many businesses will be juggling routine returns alongside amnesty applications. Compared with the 2019 amnesty, which raised an estimated Sh150 billion in revenue, the 2024 round is expected to generate a comparable but not yet quantified amount, as KRA has not released definitive collection figures at this stage.

Why it matters

For Kenyan SMEs, the tax amnesty represents both a risk mitigation tool and a strategic financial decision. By settling liabilities under the reduced rates, firms can avoid the steep penalties and interest that would otherwise accrue on overdue taxes, which can erode profit margins and jeopardise solvency. Moreover, obtaining an amnesty compliance certificate can enhance a company’s standing with lenders, suppliers and government procurement agencies that often require proof of tax compliance. On a macro level, increased revenue collection helps the national treasury fund critical public services such as health, education and infrastructure, which in turn creates a more stable operating environment for businesses. Failure to act before the 31 December deadline, however, will expose taxpayers to the full suite of penalties, including possible criminal prosecution for willful evasion, a scenario that could result in asset freezes, travel bans or even imprisonment.

Practical steps

• Review outstanding liabilities: Use KRA’s iTax portal to generate a statement of unpaid taxes, penalties and interest for each tax period.
• Calculate the amnesty discount: Apply the published reduction rates to your total liability to determine the payable amount under the amnesty.
• Gather required documents: Prepare audited financial statements, tax returns, bank statements and any supporting evidence of income for the periods in question.
• Submit the application: File the amnesty form electronically via the iTax system, attach the supporting documents and make the payment through the approved channels before 31 December.
• Obtain the compliance certificate: After processing, download the amnesty clearance certificate from iTax and keep it for future reference, especially when bidding for government contracts.

Beavoren Ventures’ Tax Planning & Compliance team can assist SMEs in navigating the amnesty process, ensuring accurate calculations, timely filing and proper documentation.

Book a consultation with Beavoren Ventures today and let us handle your compliance, books, and advisory in one place.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.