The lapse of the June 30 tax filing deadline has left many Kenyans worried about possible penalties after KRA system disruptions prevented them from filing their 2025 annual tax returns.

🇰🇪 Breaking It Down

Although taxpayers will still be penalised with the Ksh2,000 late filing penalty, taxpayers have another opportunity to regularise their tax affairs following the implementation of a new tax amnesty under the Finance Act, 2026.

The tax waiver, which took effect on July 1, 2026, allows eligible taxpayers to have penalties, interest and certain non-compliance fines waived, provided they settle the outstanding principal tax within the prescribed period.

This means that although many Kenyans will be penalised, KRA may soon announce a tax waiver that will remove the penalties and fines.

📌 What You Need to Know

The authority has urged Kenyans to closely watch its communication channels on the waiver programme as it will soon make a communication about the same.

As indicated in the Finance Bill 2026, the National Treasury proposed an update to the tax amnesty window to December 2026, giving defaulters more time to clear outstanding arrears without facing penalties and interest charges. The bill was passed by parliament before being assented to by President William Ruto, which automatically makes it operational by law.

The waiver applies to tax liabilities that arose on or before December 31, 2025.

To benefit from the amnesty, taxpayers must first pay the outstanding principal tax, which is the actual tax owed, before the set timeline.

Once the principal amount is paid within the set timeline, KRA is expected to waive the associated penalties , interest and eligible non-compliance fines. Under the new framework, taxpayers are not required to clear the penalties and interest first.

For instance, if a taxpayer owed Ksh100,000 in income tax for 2020 but failed to pay on time, attracting Ksh30,000 in penalties and interest, settling the Ksh100,000 principal before the deadline would make them eligible for the waiver of the additional Ksh30,000.

📰 Source: Kenyans.co.ke