Kenya Revenue Authority (KRA) has collected at least KES 9.07 billion from the second phase of the tax amnesty program, which concluded this weekend after 752 more defaulters voluntarily declared unpaid taxes.
The Kenya Revenue Authority (KRA) gave defaulters until the end of last week to take advantage of the Voluntary Tax Declaration Programme (VTDP), which reduces penalties and legal suits by up to 50% on interest and accrued penalties.
The programme, which helped the KRA hit its collection target for the Financial Year 2021/22, targeted all taxpayers who had undeclared income for the period between July 2015 to June 2020.
“KRA will continue to undertake compliance checks and tax audits to ensure tax compliance by all taxpayers,” said KRA’s Commissioner of Domestic Taxes Rispah Simiyu.
The KRA is now in the final stages of the plan, which will see defaulters receive up to a quarter of their interests waived, down from half in 2022.
“The VTDP runs until 31st December 2023. However, in 2023, only a 25 per cent remission of interest and penalty will be granted to those who qualify. Taxpayers who are yet to apply are, therefore, encouraged to take advantage of the programme,” added Ms Simiyu.
Defaulters who declare pending liability and pay within the first year will receive a 100% interest and penalty waiver under the program, which went into effect in January 2021.
Businesses and individuals who disclose and pay their pending tax liability within the second year of the program will receive a 50% remission, while payments received in the third year will receive a 25% reduction.
A large portion of the income declared thus far has come from 118 large taxpayers who have paid KES 5.13 billion. This is followed by 97 medium taxpayers who paid KES 2.6 billion in the first year of a program that aimed to collect Sh5 billion.
Approximately 1,709 small taxpayers have paid KES 2.57 billion through the program, which the taxman hopes to use to endear itself to the public as a caring service provider.
The financial and insurance sector, which is one of the largest taxpayers, paid the most disclosure of KES 2.25 billion, followed by services (KES 1.822 billion), ICT (KES 1.45 billion), and manufacturing (KES 1.4 billion).
KRA Tax Cheats
The KRA had collected KES 8.54 billion from defaulters and tax through the VTDP by the end of June.
The KRA reported in November that it had rejected at least 540 applications for waivers under the amnesty, which had so far recovered KES 8.54 billion from defaulters and tax cheats.
The KES 287 million applications were rejected because the declared income was allegedly earned outside of the qualifying period of July 1, 2015, to June 30, 2020.
Some applicants also failed to disclose important information, while others were being investigated for other crimes.
This fiscal year, the KRA expects to collect KES 2.14 trillion in taxes.
The VTDP applies to accrued individual income tax, corporate tax, pay-as-you-earn, withholding income taxes, capital gains tax, and value-added tax liabilities.