Introduction

The Tax Procedures (Amendment) Act, 2024 has reintroduced tax amnesty on interest, penalties, or fines on tax debt for periods up to 31st December 2023. The tax amnesty program will run from 27th December 2024 to 30th June 2025. The amnesty is applicable to:

• A person with penalties, interest or fines and has no principal taxes owing for periods up to 31^st December, 2023;  and
• A person who has principal tax accrued up to 31^st December 2023 but pays the outstanding principal tax debts by 30^th June 2025.

Tax amnesty will be applicable on all interest, penalties or fines on tax debts relating to tax periods up to 31^st December 2023.

Taxpayers are encouraged to take advantage of the Amnesty noting that the tax waiver provision are no longer in place in the Tax Acts.

Purpose

These guidelines are issued to taxpayers to guide on the implementation of the tax amnesty.

Eligibility

• All taxpayers who do not have principal tax due for periods up to 31^st December 2023 but have interest, penalties or fines due shall qualify for the tax amnesty. The amnesty under this category shall be automatic and taxpayers will not be required to make an application.
• All taxpayers who had outstanding principal tax for periods up to 31^st December, 2023 but pays all the outstanding principal tax debts by 30^th June, 2025, shall qualify as explained below;

1. The taxpayer with outstanding principal tax debts applies for the amnesty.
2. The application for the amnesty shall be accompanied by a payment plan agreement for the outstanding principal taxes.
   • All taxpayers with self-assessment or amended assessments relating to any period up to 31^st December 2023 but raised after 31^st December 2023 shall qualify, as long as the outstanding principal taxes raised in the assessment are paid before the 30^th June 2025.
   • All taxpayers with tax liabilities that are under any dispute process will qualify for the amnesty as long as they meet the conditions of the amnesty.

Exclusion from Tax Amnesty

• Fines imposed for offences committed by taxpayers that do not arise from a tax debt or are not computed based on a tax debt, shall not qualify for the amnesty.
• Penalties, interest or fines relating to tax debts accrued for the periods after 31^st December 2023, shall not qualify for the amnesty.

Effective Date

The tax amnesty commences on the 27^th December 2024 and shall remain in force until 30th June 2025.

Basis of processing the Amnesty

The tax amnesty shall be processed on the basis of the tax period and tax obligation.

Tax Liabilities covered

The tax amnesty shall cover all tax heads under tax laws covered in the Tax Procedures Act, 2015.

General Conditions for Remission of penalties and interest

A person qualifies for remission of interest, penalties or fines under the following conditions:

• Only interest, penalties or fines that relate to principal tax due for the periods up to 31^st December 2023 shall be granted amnesty upon full payment of the principal tax on or before 30^th June 2025. Where a person does not pay principal tax relating to periods before 31st December 2023 by the end of the amnesty period, any penalty and interest on the unpaid tax shall not qualify for amnesty.
• Taxpayers with debts for periods prior to 31^st December 2023 under return amendment, reconciliation or with other pending system issues, must first liaise with their respective TSOs to conclude the process. They shall then pay the outstanding principal taxes before the amnesty is granted.
• Taxpayers with tax debts for periods up to 31^st December 2023 under dispute (Objections, TAT or courts) to consider settlement of the disputes and have an agreement signed with the agreed tax liability and payment plan.

Application for Tax Amnesty

• A taxpayer who qualifies for amnesty under paragraph 3.2 shall apply for the amnesty in the iTax system.
• The system shall display the taxpayer’s debt status with all tax heads. The taxpayer will be required to apply for the amnesty by selecting the periods and tax heads, which qualifies for the amnesty.
• The taxpayer shall make full payment of the principal tax due or enter into a payment plan agreement with the Commissioner.
• The taxpayer who opts to settle the outstanding principal tax in installment shall indicate the frequency of payments in the system embedded payment plan agreement.
• The payment plan agreement shall not extend beyond 30^th June 2025. Any penalties and interest relating to the principal tax under the tax amnesty period that remains unpaid after 30^th June 2025 shall not qualify for amnesty.
• By accepting the terms and conditions of the amnesty, the taxpayer commits to honouring the payment plan agreement.
• Amnesty shall be granted upon the payment of the final installment in the committed payment plan agreement.
• A detailed user guide on the Amnesty application process is available on the KRA website, where all the Taxpayers shall be directed for comprehensive amnesty application details.

Treatment of Balance of Tax and Monthly Taxes

• The Law allows for payment of balance of tax to 30^th April 2024 for a person whose year-end is December 2023. Therefore, interest, penalties or fines in relation to principal tax due for the year ended 31^st December 2023 are eligible for the amnesty.
• Tax point for monthly taxes for December 2023 period falls on any day in the month of December 2023. The law however allows payment to be deferred up to the subsequent month on specified due dates. Therefore, interest and penalties in relation to principal taxes due for the Month of December 2023 are eligible for amnesty.

Disclaimer

Taxpayers are hereby notified that if there is any inconsistency between the provision of the Tax Laws and the information contained herein, the Tax Laws shall prevail.