The National Treasury has announced an extension of the tax amnesty period, providing additional time for tax defaulters to clear their outstanding obligations without incurring penalties or interest.
The revised measure extends the tax amnesty program through December 31, 2026. Eligible taxpayers must complete full payment of all unpaid principal tax amounts by the new deadline.
This modification appears in the Finance Bill, 2026, through revisions to Section 37E of the Tax Procedures Act.
Under the updated provisions, taxpayers who settle all principal tax obligations incurred prior to December 31, 2025, will receive relief from associated penalties and interest.
The amendment specifies that the Kenya Revenue Authority (KRA) Commissioner will suspend collection of penalties and interest from taxpayers who pay the principal tax amount within the established timeframe.
The legislation also establishes a new opportunity for taxpayers who had not completely settled their principal tax obligations by the end of 2025.
These taxpayers must apply for tax amnesty and provide a payment schedule for the outstanding tax amounts due to KRA.
The proposed legislation indicates that the amnesty will cover only penalties and interest that accrued through December 31, 2025.
Taxpayers seeking relief must refrain from incurring new tax liabilities during the repayment timeframe.
Additionally, applicants must sign a commitment document agreeing to settle all remaining tax debts owed to the tax administration.
The provision further clarifies that the amnesty will be available only once to eligible taxpayers who satisfy all stipulated legal requirements.
However, any applications submitted after December 31 will incur penalties and interest, with no additional amnesty opportunities permitted.
The amendment also excludes penalties under Section 85 of the Tax Procedures Act from any waiver. Consequently, tax avoidance penalties, which are imposed at double the amount of tax evaded as per Section 85, remain ineligible for amnesty consideration.