MPs reject small traders’ pleas to extend KRA tax amnesty

Legislators have resisted the push by small traders and lobbies for an extension of an ongoing partial tax pardon for another year, citing loss of revenue for the taxman.

Kamukunji Community Empowerment Centre, a network bringing together community-based organisations, had petitioned the Finance and Planning Committee of the National Assembly to extend the 10-month amnesty on accrued penalties and interest to enable more taxpayers to comply.

The Ruto administration has under the Finance Act 2023 offered a partial tax pardon which automatically waives accumulated penalties and interest for taxpayers who pay up principal tax arrears for the period through December 2022.

Besides extending the compliance period, the lobby had also appealed for the period for taxpayers to clear principal tax sums to be extended by a year.

“With the increased collections witnessed by the KRA from this programme, and the previous Voluntary Tax Disclosure Programme, extending the current amnesty programme may boost revenue collection by encouraging self-disclosure of liabilities by taxpayers,” the group had argued.

“It will also grant more taxpayers an opportunity to clean up their tax ledgers, and consequently, help the KRA to clean up its receivables.”

The Kenya Revenue Authority (KRA) had netted Sh20.8 billion by April 25 from taxpayers who had self-declared Sh28.7 billion as unpaid through the programme which was launched in September 2023.

The tax amnesty programme aims to enhance compliance and revenue mobilisation, while giving taxpayers with disputes a leeway to benefit from the alternative tax dispute resolution framework, according to the KRA.

“The Committee was of the view that this proposal will lead to revenue losses,” the Kuria Kimani-led team wrote in its report on Finance Bill 2024.

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