What happened

The Kenya Revenue Authority (KRA) has confirmed that the ongoing tax amnesty will end on 31 December. The announcement, made through the KRA’s official channels and reported by People Daily, urges all taxpayers – individuals, businesses and corporate entities – to settle outstanding tax liabilities before the cut‑off date to benefit from reduced penalties and interest. Failure to comply after the deadline will revert to the standard rates prescribed under the Income Tax Act and other relevant statutes.

Context and background

KRA introduced the tax amnesty as part of its broader effort to widen the tax base and improve compliance ahead of the upcoming fiscal year. The programme follows a series of similar initiatives launched in previous years, each designed to encourage voluntary disclosure of undeclared income and unpaid taxes. Unlike earlier rounds, this amnesty is being rolled out with a tighter timeline and a focused communication strategy aimed at reaching small and medium enterprises (SMEs) across the country.

The authority has been conducting outreach through regional tax offices, radio programmes in Kiswahili and English, and digital platforms such as the iTax portal. KRA officials have highlighted that the amnesty covers income tax, value‑added tax (VAT), customs duties and other statutory levies, provided the taxpayer files the required returns and pays the assessed amount within the stipulated period. The move comes after the government’s mid‑year budget review, which identified a shortfall in revenue collection and called for measures to boost domestic resources.

Key stakeholders, including the Federation of Kenyan Employers (FKE) and the Kenya Association of Manufacturers (KAM), have welcomed the deadline, noting that many businesses still have pending obligations from the 2022‑2023 tax year. While the amnesty does not absolve taxpayers of future compliance, it offers a one‑time opportunity to regularise past defaults at a lower cost. KRA has warned that any attempt to manipulate the system after the deadline will attract severe penalties, including possible prosecution.

Compared with what is normal

Historically, Kenya’s tax amnesties have been spaced several years apart, with the most recent major amnesty occurring in 2019. The current deadline of 31 December is earlier in the calendar year than previous cut‑offs, which often fell in March or April. This shift reflects KRA’s intent to capture revenue before the year‑end financial closing of many companies.

• Previous amnesties allowed a six‑month window; the present programme gives roughly three months from its launch.
• Penalty reductions this time are capped at 50 % of the standard rate, whereas earlier rounds sometimes offered up to 70 % relief.
• The scope now explicitly includes customs duties on imported goods, a category that was only partially covered in earlier initiatives.

Why it matters

For Kenyan SMEs, the tax amnesty presents a practical way to clear historic liabilities that may be hindering access to credit or government contracts. Unsettled tax debts can trigger asset freezes, travel bans for directors and exclusion from tender processes. By taking advantage of the reduced penalties, businesses can improve their credit rating and demonstrate fiscal responsibility to banks and investors.

Individual taxpayers, especially those with informal income streams, also stand to benefit. Settling arrears before 31 December can prevent the accrual of high interest that would otherwise compound over the next fiscal year. Moreover, compliance under the amnesty can simplify future filing obligations, as the taxpayer’s record will show a clean slate once the settlement is processed.

On a macro level, the amnesty is expected to inject additional revenue into the national treasury at a time when the government is financing infrastructure projects and social programmes. While the exact amount of revenue to be generated remains undisclosed, KRA estimates that the initiative could narrow the fiscal gap by several hundred million shillings.

Practical steps

• Log onto the iTax portal or visit your nearest KRA office to obtain a tax clearance certificate and verify any outstanding balances.
• Prepare a full list of unpaid taxes, including income tax, VAT, and customs duties, and calculate the reduced penalties applicable under the amnesty.
• Set aside the required funds and make the payment through the designated channels – mobile money, bank transfer or KRA’s electronic payment gateway – before the 31 December deadline.
• File the necessary tax returns and submit the amnesty declaration form, ensuring all supporting documents are attached.
• Keep a copy of the payment receipt and the acknowledgement from KRA as proof of compliance for future reference.

Our Tax Planning & Compliance service at Beavoren Ventures can guide you through the amnesty process, from assessing liabilities to filing the correct forms and ensuring timely payment.

Talk to our team at Beavoren Ventures - info@beavorenventures.co.ke - to set up your systems correctly.

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.