As of the end of last week, the Kenya Revenue Authority (KRA) had granted Sh209 billion in waivers for accrued interests and penalties to at least 227,071 taxpayers. This initiative forms part of a tax pardon scheme running from September 1, 2023, to June 30, 2024, according to the latest update from the tax authority.

Under this programme, introduced by the Finance Act 2023, taxpayers with accrued penalties and interests on unpaid taxes until December 31, 2022, are eligible for waivers. The waivers are granted upon full payment of the principal taxes owed to KRA by June 30, 2024.

As of February 20, 2024, taxpayers benefited from the waiver of penalties and interest after paying a total of Sh14.5 billion in principal taxes, as reported by KRA. The authority encourages taxpayers with ongoing tax disputes to consider expedited resolution through the Alternative Dispute Resolution (ADR) framework to take advantage of the ongoing tax amnesty.

KRA underscores the importance of taxpayers filing returns for the amnesty period to benefit fully from the Tax Amnesty Programme. Notably, provisions on waiver of penalties and interest and on abandonment of taxes were repealed by the Finance Act, 2023, highlighting the significance of timely compliance.

In light of the revenue collection challenges faced by the government, KRA is under pressure to boost collections through schemes like tax waivers. The government’s tax revenue targets for the six months ending December 2023 were missed by Sh186.2 billion, with ordinary revenue recording a 14.6 percent shortfall.

Treasury data indicates that all tax heads fell short of their targets during the period under review. Import duty and excise duty, for instance, experienced shortfalls of Sh19.4 billion and Sh30.78 billion, respectively, compared to their targets. Despite challenges in tax collection, appropriations-in-aid (AIA), composed of fees for public services, exceeded its target by Sh46.9 billion during the same period.