How to Benefit from KRA's Tax Amnesty Program
In an effort to provide relief to taxpayers and encourage compliance, the Kenya Revenue Authority (KRA) introduced a Tax Amnesty Program, offering a golden opportunity for individuals and businesses to address outstanding tax issues. The program, which commenced on 1st September 2023, extends to 30th June 2024 and covers penalties and interest accrued up to 31st December 2022. In this article, we will delve into the details of this program, its eligibility criteria, and how you can benefit from it.
Eligibility for the Tax Amnesty
The Tax Amnesty Program is open to specific categories of taxpayers. To benefit from the amnesty, you must meet the following criteria:
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For those with penalties and interest but no principal taxes due: If you have accrued penalties and interest, but do not owe any principal taxes for the period up to 31st December 2022, you qualify for an automatic amnesty. In this case, there is no need to apply separately for the amnesty.
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For those with outstanding principal taxes: If you have principal taxes outstanding up to 31st December 2022, you can still benefit from the tax amnesty. To qualify, you must take the following steps:
- Apply for the amnesty through the KRA's iTax system.
- Submit a payment plan proposal for the outstanding principal taxes along with your application.
Exclusions from the Tax Amnesty
It's essential to note that not all tax-related liabilities are eligible for this amnesty. The following exclusions apply:
- Penalties and interest imposed under Section 85 (Tax Avoidance) of the Tax Procedures Act, 2015, do not qualify for amnesty.
- Any penalties and interest incurred after 31st December 2022 are not covered by the amnesty.
Application Process
If you meet the eligibility criteria, you can apply for tax amnesty through the KRA's iTax system. Here's a breakdown of the application process:
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Debt Status Review: Upon accessing the system, you can review your debt status, including all tax heads. This step is crucial as it helps you identify the periods and tax heads that qualify for the amnesty.
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Amnesty Application: Select the specific periods and tax heads that meet the amnesty criteria and proceed to apply for the amnesty.
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Payment: You can choose to make a full payment of the principal tax due, or you can opt for a payment plan agreement with the KRA Commissioner. If you choose to settle your outstanding principal taxes in installments, you must specify the frequency of payments within the system.
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Completion and Amnesty: The payment plan agreement should not extend beyond 30th June 2024. Upon making the final installment as agreed in the payment plan, you will be granted amnesty for the covered penalties and interest.
Benefits of the Tax Amnesty
The Tax Amnesty Program provides a unique opportunity for taxpayers to clean up their tax ledgers and save on penalties and interest. For those who have applied for waivers of penalties and interest and have cleared their principal tax up to 31st December 2022, the KRA will automatically remove penalties and interest from its iTax system.
Furthermore, this amnesty program aligns with the government's objective of increasing revenue collection. It is a win-win situation for both taxpayers and the government, as taxpayers can regularize their tax affairs and save money while the government aims to boost revenue.
Conclusion
The Tax Amnesty Program by the Kenya Revenue Authority offers a lifeline to individuals and businesses burdened by penalties and interest on their tax debt. By providing clear guidelines and eligibility criteria, the KRA encourages taxpayers to take advantage of this opportunity and settle their outstanding taxes. To benefit from the program, taxpayers should act promptly, as the amnesty period ends on 30th June 2024. This initiative not only facilitates financial relief for taxpayers but also contributes to the growth of the nation's revenue.
In summary, the tax amnesty program serves as an essential tool to enhance tax compliance, reduce the burden on taxpayers, and promote a healthier financial ecosystem. For any specific queries regarding the amnesty program, it's advisable to consult with the tax team and leverage this unique opportunity to resolve tax-related issues. The Tax Amnesty Program is a testament to the government's commitment to supporting taxpayers and fostering economic growth.