Treasury Secretary Henry Rotich has raised the fine to two per cent of the unpaid tax from the current one per cent.
Penalties on unpaid tax have been doubled as the government moves to net cheats and boost revenues.
Treasury Secretary Henry Rotich has raised the fine to two per cent of the unpaid tax from the current one per cent.
“Mr Speaker, despite imposing a one per cent late payment interest on unpaid taxes, we have noted that a number of taxpayers are filing returns without payment of the taxes due. I am therefore proposing to amend the Tax Procedures Act to increase the rate of late payment interest to two per cent, and also introduce a 20 per cent late payment penalty,” said Mr Rotich.
Filing tax returns is one of the taxman’s favoured avenues to net tax defaulters and grow revenue.
Kenyan law requires anyone with a PIN to file returns annually - including a nil return.
Kenya in 2015 raised the penalty for failure to file returns to Sh20,000 from Sh1,000, but the enhanced fines took effect last year. In 2016, the number of taxpayers registered on KRA’s online platform - iTax - doubled to four million from July 2015’s figure of 1.6 million.
About 1.3 million individuals have filed their tax returns with less than a month left to the June 30 deadline. The compliance was a 400,000 improvement on tax returns filed between January and April last year.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
