The Kenya Revenue Authority (KRA) has announced two measures affecting taxpayers: an Automated Payment Plan (APP) for settling tax debts in installments, a new system for validating income and expenses declared in tax returns starting next year.
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Automated Payment Plan for Outstanding Taxes
KRA says the new Automated Payment Plan will allow individuals and businesses to pay off outstanding tax liabilities- including principal tax, penalties, and interest- through structured monthly installments. The plan is intended to help taxpayers who face genuine difficulty paying their full tax bill at once.
To qualify, applicants must:
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Hold a valid KRA PIN and be up to date on their iTax registration details
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Have a confirmed tax liability that is not under dispute
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Demonstrate that paying the full amount in a single installment is impractical
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Submit an installment proposal via iTax or other approved KRA systems
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Keep the repayment period within six months
KRA warned that defaulting on the agreed schedule could lead to termination of the plan and possible enforcement actions, such as loss of a Tax Compliance Certificate.
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Income and Expense Validation to Begin in 2026
From 1st January 2026, KRA will begin verifying income and expense figures declared in tax returns against data from three main sources:
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TIMS/eTIMS (Tax Invoice Management System) invoices,
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Withholding Income Tax records, and
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Import records from Custom Systems.
The checks will apply to returns for the 2025 accounting year submitted via the iTax platform. According to KRA, all income and expense declarations will need to be supported by valid electronic tax invoices correctly transmitted with the buyer’s PIN.
The new validation process follows the rollout of the Electronic Tax Invoice Regulations, 2024, which require businesses to issue and report tax invoices electronically. The aim is to align reported figures with real transaction data, reducing discrepancies and undeclared income.
What This Means for Taxpayers
The two changes mark a shift toward tighter oversight and more automated enforcement in Kenya’s tax system. While the payment plan could offer short-term relief for struggling taxpayers, the upcoming validation process will likely increase scrutiny of business records and electronic invoicing compliance.
