The Kenya Revenue Authority (KRA) has launched waivers on tax penalties that were incurred in the past five years. The decision is seen as a way to further cushion the economic effect that the ongoing Coronavirus pandemic has had on taxpayers in Kenya.
The Kenya Revenue Authority (KRA) announced on Monday the 11th of January 2021, that all taxpayers will now be able to access and utilize partial relief or full relief on interests and penalties on undisclosed taxes, via a programme that will run from the 1st of January 2021, to the 31st of December 2023 according to Business Daily Africa.
The Finance Act, 2020 introduced the Voluntary Tax Disclosure Programme (VTDP). The Voluntary Tax Disclosure Programme (VTDP) is intended to provide relief on interests and penalties on any and all tax liabilities disclosed and incurred from the period between the 1st of July 2015 and the 30th of June 2020.
The Kenya Revenue Authority (KRA)’s Commissioner for Domestic Taxes Department made it know via a statement that, “VTDP applies to all tax liabilities accrued/derived in the specified period including individual Income Tax, Corporate Tax, PAYE, Withholding Income Tax, Capital Gains Tax, Value Added Tax, Withholding VAT, Excise Duty, Monthly Rental Income Tax and Turnover Tax.”
According to the Kenya Revenue Authority (KRA) the Voluntary Tax Disclosure Programme (VTDP) is intended to be a relief to its taxpayers during the still ongoing Coronavirus pandemic which has put a strain on many economies all over the world.
The kind of relief will however vary from taxpayer to taxpayer and will depend on how quickly they pay. The first to pay, will benefit more.
According to the Kenya Revenue Authority (KRA), “Persons who make full payment of disclosed taxes in 2021 will get 100 per cent relief in penalties and interest while those who pay in 2022 and 2023 shall get relief at a rate of 50 per cent and 25 per cent respectively.”
It added that all taxpayers who utilize or make use of the Voluntary Tax Disclosure Programme (VTDP) will not be prosecuted for any disclosed tax liabilities, appeal or other remedies with respect to the taxes, interests it remits and penalties.
All taxpayers under investigation, audit, compliance verification and who have been served a Notice of Intention to carry out said actions, will be exempted from the Voluntary Tax Disclosure Programme (VTDP).
In the words of the Kenya Revenue Authority (KRA), “A taxpayer will not be eligible to apply for relief under the programme if he/she is a party to an ongoing litigation in respect to the tax liability or any matter relating to the tax liability.”
The Kenya Revenue Authority (KRA) has also stated that all taxpayers who disclose and proceed to pay their taxes, will also be issued with a Voluntary Tax Disclosure Programme (VTDP) certificate to show that they indeed participated in the programme.
The government agency aims to grow its tax base even with the still ongoing Coronavirus pandemic and its effect on the economy and beyond.
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