Firms, individuals commit Sh1bn in tax amnesty plan


Taxpayers at KRA offices in Mombasa. FILE PHOTO | NMG

Businesses and individuals suspected of tax evasion have committed more than Sh1 billion under a tax amnesty programme that cushions beneficiaries from penalties and legal suits.

KRA manager for Taxpayer Services Wanja Wang’ondu said that slightly over 1,000 businesses and individuals had declared their tax liabilities as at end of May under the amnesty.

Ms Wang’ondu however refused to disclose the amount already paid under the Voluntary Tax Disclosure Programme (VTDP) that started on January 1.

KRA has offered businesses and individuals up to 100 per cent interest and penalties waiver on taxes that have not been paid in five years.

“The total declaration under the Voluntary Tax Disclosure Programme stands at over Sh1 billion as at end of May,” said Ms Wang’ondu in an interview with the Business Daily Tuesday.

Under the voluntary tax disclosure programme, which will run up to 2023 those who declare pending liability and pay within one year shall enjoy 100 percent interest and penalty waiver.

Those who voluntarily disclose and pay the pending tax liability within the second year of the programme will receive remission of 50 percent while payments that come in the third year will attract a 25 percent relief.

Businesses and individuals who were under investigation or had cases before the tax appeals tribunal or courts before January 1 when the programme started have however been locked out of the amnesty window.

KRA is betting on the amnesty programme and new taxes to improve its collections amid the Coronavirus economic disruptions that have hurt collections.

Treasury data shows that the taxman collected Sh1.19 trillion in the ten months to April, representing a four percent fall from Sh1.24 trillion collected in similar period last year.

The drop in revenue collection in the ten months to April came despite reinstatement of maximum payroll and standard value added tax (VAT) rates to pre-Covid period levels from January 1, 2021.

KRA targets to raise Sh1.47 trillion in the year ending June, down from the Sh1.6 trillion collected in the year to last June.