By Samuel Migele
Kenyan Taxpayers will now get full or partial relief of penalties and
interest on undisclosed taxes for the last five years. This will be
effected through the newly introduced Voluntary Tax Disclosure
Programme which is aimed at providing relief to taxpayers during the
challenging economic times brought about by Covid-19 pandemic. The
programme is also aimed at enhancing tax compliance through disclosure
of unpaid taxes.
The Voluntary Tax Disclosure Programme (VTDP) introduced vide the
Finance Act, 2020 commenced on 1st January 2021 and shall run for three
years to 31st December 2023. The programme seeks to grant relief on
penalties and interest on any tax liability disclosed in respect to the
period of 5 years running from 1st July 2015 to 30th June 2020.
Taxpayers who take advantage of the programme will receive full or
partial waiver of the penalties and interest, depending on the time of
payment of disclosed taxes. Persons who make full payment of disclosed
taxes in 2021 will get 100% relief in penalties and interest while
those who pay in 2022 and 2023 shall get relief at a rate of 50% and
25% respectively. Detailed guidelines on the VTDP can be accessed on
our website (www.kra.go.ke)
VTDP applies to all tax liabilities accrued/derived in the specified
period including individual Income Tax, Corporate Tax, PAYE,
Withholding Income Tax, Capital Gains Tax, Value Added Tax, Withholding
VAT, Excise Duty, Monthly Rental Income Tax and Turnover Tax.
In addition to the waiver of penalties and interest, a person granted
relief under the programme shall not be prosecuted for the disclosed
tax liabilities. Further those granted relief in accordance with the
provision of the VTDP shall not appeal or seek any other remedy with
respect to the taxes, penalties and interest remitted by KRA.
The settlement of taxes under the programme will be executed through an
agreement with the Commissioner and taxpayers are encouraged to ensure
compliance with payment agreements contained therein. Taxpayers are
allowed one amendment of the original declaration of return at any time
before the lapse of agreement.
taxpayer will not be eligible to apply for relief under the programme
if he/she is;
Under audit, compliance verification or investigation
Has been served with a notice of intention to investigate or carry out
an audit/compliance check for the undisclosed tax
Is a party to an ongoing litigation in respect to the tax liability or
any matter relating to the tax liability.
Relief under the programme shall only apply in respect to a disclosure
resulting in payment of taxes.
Taxpayers will be issued with a VTDP certificate, which will serve as
evidence that the person took advantage of the programme in relation to
the taxes specified in that certificate.