Home BUSINESS NEWS Kenya Treasury will from 2021 offer upto 100% waivers on tax cheats

Kenya Treasury will from 2021 offer upto 100% waivers on tax cheats

by biasharadigest

National Treasury will from next year begin granting waivers of upto 100% on interest and penalties to individuals and firms that abscond from their tax obligations. The idea is to encourage firms and individuals to voluntarily declare accumulated tax arrears.

Under this disclosure regime, which kicks of with effect from January 1, 2021, and will run for three years, those who disclose what they owe the taxman and settle the bill within one year, will get 100 per cent interest and penalty waiver.

Those who clear their bills within the second year will get 50 % waiver while arrears paid in the third year will have 25% relief. These waivers are contained in the Finance Bill 2020, sponsored by parliamentary Finance and National Planning Committee chairman Hon. Joseph Limo.

The Treasury has proposed changes to the Tax Procedure Act to accommodate the voluntary tax disclosure program. This is a departure from past overtures by Kenya Revenue Authority (KRA) which has been hot on the heels of tax evaders.

The Taxman has been aggressive since last year, actively in pursuit of eligible taxpayers who fail to pay their bills.

Between July and September 2019, KRA was able to nab 118 individuals with assessed revenue of Ksh 54.3 Billion between 1st July and 30th September 2019. During the 2018/2019 financial year, KRA recovered KSh 8.53 billion from 222 tax evasion cases won.

List of most notorious tax evaders includes betting firms, electronics dealers, excisable goods manufacturers, steel and hardware dealers, county suppliers, high-end motor vehicle importers and those firms engaged in the real estate business.

While KRA has been dragging tax evaders to court, it now says a person granted relief shall not be prosecuted.

However, suspected tax cheats under audit, investigation or party to an ongoing litigation, will not benefit from this latest amnesty from KRA.

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