KRA waives Sh165 billion in penalties as over three million Kenyans benefit from tax amnesty
The second phase of the programme, launched in December, targets penalties and interest accumulated up to December 2023.
The Kenya Revenue Authority (KRA) has waived Sh165 billion in tax penalties, interest, and fines in just five months as more than three million taxpayers took advantage of the ongoing tax amnesty window.
The amnesty, which began in December 2023, has drawn strong interest from businesses and individuals keen to settle outstanding tax obligations ahead of the June 30 deadline.
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“The Tax Amnesty Programme has seen strong uptake, generating Sh13.5 billion in revenue between December 2024 and April 2025. KRA has waived Sh164.9 billion in penalties and interest, benefiting over three million taxpayers,” the authority said in a statement last Thursday.
The second phase of the programme, launched in December, targets penalties and interest accumulated up to December 2023.
Taxpayers who settle their principal tax by June 30, 2025, qualify for a full waiver of these charges. Those without any outstanding principal tax as of December 2023 automatically had their penalties written off.
Taxpayers with unpaid principal taxes still have a chance to benefit, provided they apply for a payment plan and clear the arrears by the set deadline next year.
The approach has provided much-needed relief to businesses and individuals burdened by historic tax debts.
The current drive builds on the earlier phase of the amnesty, which saw the KRA forgive Sh508 billion in penalties and interest for taxpayers who cleared their principal tax for the period up to December 2022.
The amnesty is part of a broader strategy to improve compliance and grow the tax base.
Other efforts include the rollout of a Centralised Release Office to enhance customs revenue performance and the Electronic Rental Income Tax System, which supports landlords in filing taxes and managing tenancy records.
Despite a tough economic environment marked by sluggish private sector activity and a slowdown in trade, these reforms have helped the KRA grow total tax revenue by 3.6 per cent to Sh1.91 trillion in the 10 months to April 2024.
An additional Sh205.52 billion was raised in agency collections, exceeding the target for that period.
Domestic tax collections rose by 4.7 per cent to Sh1.39 trillion, while customs revenue climbed by 9.1 per cent to Sh722.74 billion.
However, the gains came against a backdrop of weakening credit growth, with private sector lending up only 0.2 per cent in March. Non-performing loans also rose, hitting 17.2 per cent in February, with the worst-affected sectors including real estate, trade, manufacturing, and construction.
Meanwhile, export performance declined, with earnings from tea falling by 18.6 per cent and horticulture by 6.2 per cent over the same period.
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