Tax relief for Kenyan taxpayers

Tax relief for Kenyan taxpayer

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 (

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.

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