KRA Waives Penalties and Interests For All Kenyans
KRA Waives Penalties and Interests For All Kenyans. In a significant move aimed at promoting voluntary tax compliance and offering relief to Kenyan taxpayers, the Commissioner General of the KRA), Humphrey Wattanga, made a groundbreaking announcement on Monday. He stated that the tax authority would waive tax interest accrued before December 2022, provided the principal tax is paid in full. This generous tax interest write-off aligns with the recently proposed Tax Amnesty Program introduced in the Finance Act 2023.
The primary objective of this measure is to encourage taxpayers nationwide to comply with their tax obligations voluntarily. Over the years, the KRA has been diligently working towards improving voluntary tax compliance, and this Tax Amnesty Program represents a significant step in that direction.
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The Tax Amnesty Program, as envisaged in the Finance Act of 2023, plays a pivotal role in enhancing voluntary tax compliance. As a token of appreciation to taxpayers, individuals who have accrued interest on their tax dues up to December 2022 are strongly encouraged to promptly settle their principal tax obligations. Doing so will make them eligible for the cancellation of penalties and any accrued interests.
Under the provisions of the Finance Act, the amnesty program is set to be in effect from September 1 through June 30, 2024. To participate in this program, Kenyan taxpayers must apply through the tax system that the KRA operates. It is important to note that individuals who have accrued penalties and interest without clearing the principal tax for periods up to December 31, 2022, are eligible for the program. Individuals who have accrued principal tax interest and have already paid the principal tax can also benefit from this initiative.
In line with the Act’s guidelines, any application for amnesty must accompany a proposed payment plan outlining the settlement of delinquent principal taxes. This provision ensures that individuals can work out a structured approach to settling their outstanding tax liabilities and take full advantage of the amnesty program.
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This development is in harmony with President William Ruto’s objective of waiving accrued penalties on taxes due before January 1, 2023. Beginning in September, the Head of State emphasized that his decision to suspend these penalties stems from the concerns raised by Kenyan citizens regarding the mounting interest in their tax obligations. Ruto further explained that this exemption will alleviate Kenyans’ financial burden and align with the government’s broader vision of fostering a fair and inclusive economy.
The earlier announcement, which took effect on September 1, 2023, indicated that taxpayers would have the option to clear only the principal amount of their outstanding tax debts incurred before January 1, 2023. During these nine months, the KRA has committed to waiving penalties and interests. This offer is a clear incentive for the taxpaying public to seize the opportunity and keep their tax liabilities current.
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In conclusion, the Kenya Revenue Authority’s decision to waive penalties and interests for Kenyan taxpayers represents a significant step towards encouraging voluntary tax compliance and alleviating the financial stress faced by individuals with outstanding tax dues. The Tax Amnesty Program introduced through the Finance Act of 2023 and President William Ruto’s commitment to this cause underscores the government’s dedication to creating a more equitable and inclusive economy. As this amnesty program takes effect, taxpayers are urged to use this unique opportunity to settle their tax obligations and enjoy the benefits of reduced financial burdens. This initiative promotes fiscal responsibility and contributes to the overall economic well-being of Kenya and its citizens.