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Economy

Treasury woos tax cheats with 100pc penalty waiver

Treasury Secretary Ukur Yatani
Treasury Secretary Ukur Yatani. FILE PHOTO | NMG 

The Treasury has offered up to 100 percent interest and penalties waiver on taxes that have not been paid in five years in a move to encourage firms and individuals to voluntarily declare accumulated bills.

Under the voluntary tax disclosure programme, which shall run for three years with effect from January 1, 2021, the Treasury says 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 have 25 percent relief.

The changes are contained in the Finance Bill 2020 that is sponsored by the parliamentary Finance and National Planning Committee chairman Joseph Limo.

The Treasury has proposed changes to the Tax Procedure Act to accommodate the voluntary tax disclosure programme.

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“Voluntary tax disclosure programme means a programme where a person discloses the persons’ tax liabilities to the commissioner for purposes of being granted relief of penalties and interests on the tax disclosure,” the amendments to the Act states.

“A person granted relief under this section shall not be prosecuted with respect to tax liability disclosed and shall be granted a remission of interest and penalty due on the tax liability.”

The programme will, however, lock out taxpayers under audit, investigation or party to ongoing litigation in respect of the tax liability or any matter relating to the tax liability.

The Finance Bill was submitted by the Treasury Secretary Ukur Yatani and formulates proposals announced in the budget for 2020/21 relating to and collection of taxes.

The Bill requires the disclosure of tax liability to be done confidentially using a prescribed form.

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