Kenya Revenue Authority effects relief on undisclosed taxes

KRA Head Office in Nairobi (PHOTO: FILE)

NAIROBI, KENYA: The Kenya Revenue Authority (KRA) has moved to boost its collection through a programme targeting undisclosed taxes for the past five years.

In a notice, KRA said taxpayers will now get full or partial relief of penalties and interest on undisclosed taxes for the last five years.

The Voluntary Tax Disclosure Programme (VTDP) introduced vide the Finance Act, 2020 commenced on January 1 this year and shall run for three years to December 31, 2023.

“The programme seeks to grant relief on penalties and interest on any tax liability disclosed in respect to the period of five years running from July 1 2015 to June 30 2020. Taxpayers who take advantage of the programme will receive a full or partial waiver of the penalties and interest, depending on the time of payment,” a statement from the Commissioner for Domestic Taxes Department says.

“Persons who make full payment of disclosed taxes in 2021 will get 100 per cent relief in penalties and interest while those who pay in 2022 and 2023 shall get relief at a rate of 50 per cent and 25 per cent respectively.”

VTDP applies to all tax liabilities accrued 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 reliefs following 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.

However a taxpayer will not be eligible to apply for relief under the programme if he or she is under audit, compliance verification, or investigation, has been served with a notice of intention to investigate or carry out a compliance check for the undisclosed tax, and is a party to ongoing litigation in respect to the tax liability or any matter relating to the tax liability.