The taxman has collected at least Sh9.07 billion from the second phase of the tax amnesty programme that ended over the weekend after 752 additional defaulters voluntarily declared unpaid taxes.
The Kenya Revenue Authority (KRA) had given defaulters up to the end of last week to take advantage of the Voluntary Tax Declaration Programme (VTDP) that cushions defaulters from penalties and legal suits by up to 50 per cent 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 moving to the last phase of the plan which will now only see defaulters get up to a quarter of their interests waived 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.
Under the programme, which became effective in January 2021, defaulters who declare pending liability and pay within the first year shall enjoy a 100 per cent interest and penalty waiver.
Businesses and individuals that disclose and pay the pending tax liability within the second year of the programme were to receive a remission of 50 per cent while payments that come in the third year will have 25 per cent relief.
A big chunk of the income that has so far been declared has come from 118 large taxpayers, who have paid Sh5.13 billion.
This is followed by 97 medium taxpayers who have paid Sh2.6 billion in a programme that targeted to collect Sh5 billion in its first year.
Among the small taxpayers, about 1,709 have paid Sh2.57 billion through the programme that the taxman would like to use to endear itself to the public as a caring service provider.
The financial and insurance sector, one of the largest taxpayers, had the most disclosure paying Sh2.25 billion, services (Sh1.822 billion), ICT had Sh1.45 billion while manufacturing hit Sh1.4 billion.
Tax cheats
By the end of June, the KRA had collected Sh8.54 billion from defaulters and tax through the VTDP.
In November, the KRA reported it had rejected applications from at least 540 firms seeking waivers under the amnesty that has so far recovered Sh8.54 billion from defaulters and tax cheats.
The applications worth Sh287 million were rejected because the income declared was reportedly earned outside the qualifying period of July 1, 2015, to June 30, 2020.
Some applicants also failed to disclose some material facts while others were under investigation for other crimes.
The KRA has a tax collection target of Sh2.14 trillion this fiscal year.
The VTDP applies to tax liabilities including accrued individual income tax, corporate tax, pay-as-you-earn, withholding income taxes, capital gains tax and value-added tax.
