2025 Tax Amnesty in Kenya: What You Need to Know

TAX AMNESTY IN KENYA: EVERYTHING YOU NEED TO KNOW ABOUT THE 2025 TAX AMNESTY

May 30, 2025

Tax amnesty programs provide taxpayers with an opportunity to regularize their tax affairs by waiving penalties, interest, or fines – provided they settle their principal tax obligations.

In Kenya, the 2025 tax amnesty program offers such a window for compliance and financial relief.

This guide covers everything you need to know about tax amnesty in Kenya, including how it works, who qualifies, how to apply, and what the 2025 tax amnesty means for you.

What is Tax Amnesty?

Tax amnesty is a limited-time program implemented by a country’s tax authority to allow taxpayers to voluntarily declare and settle outstanding tax liabilities.

In return, the taxpayer receives relief from penalties, interest, or fines associated with the unpaid taxes.

What’s the Purpose of a Tax Amnesty?

A tax amnesty serves several key purposes:

To boost tax revenue for the government.
To encourage voluntary compliance among taxpayers.
To offer relief to taxpayers unable to meet past obligations.
To expand the tax base by bringing in non-compliant or informal taxpayers.

Key Features of a Tax Amnesty

Time-Bound: Available for a fixed period only.
Focus on Voluntary Compliance: Encourages taxpayers to regularize their status without the burden of enforcement.
Penalty and Interest Waiver: Taxpayers benefit from waiver of accrued penalties and interest.
Revenue Collection Goal: Designed to improve short-term revenue collections and strengthen long-term compliance.

Brief History of Tax Amnesty in Kenya

Tax amnesty is not new to Kenya. The government has implemented several amnesties in the past to encourage compliance and broaden the tax base.

Let’s take a look at some of them:

2004 – First Tax Amnesty

Focused on income tax.
Targeted informal sector businesses.
Aimed to encourage voluntary disclosure of income.

2016/2017 – Foreign Income Amnesty

Introduced via the Finance Act 2016.
Applied to Kenyans with offshore income.
Offered relief on penalties and interest if income was declared and repatriated by June 2018.
Extended to June 2019 due to low uptake.

2023 – Removal of Tax Waiver Powers

The Finance Act 2023 repealed the Cabinet Secretary’s authority to waive taxes.
Resulted in the suspension of ad hoc tax amnesty programs.

2024/2025 – Current Tax Amnesty

Re-introduced under the Tax Procedures (Amendment) Act, 2024.
Covers interest, penalties, and fines on tax debt accrued up to 31st December 2023.
Runs from 27th December 2024 to 30th June 2025.

Case Study: Miss Sydney's Tax Journey

Let’s briefly look at this case study to better understand what a tax amnesty entails:

Miss Sydney, a 22-year-old recent graduate, landed her first job in 2022. Her employer made monthly PAYE submissions, but she did not file her personal tax returns in 2022 and 2023.
Upon checking her iTax account, she finds she owes penalties and interest for failing to file returns, even though her PAYE was submitted. Now unemployed, she is unsure what to do.

Can Miss Sydney benefit from the 2025 tax amnesty?

Yes.

Since she has no principal tax due (her employer paid it via PAYE), and her penalties are for the period before 31st December 2023, she automatically qualifies for automatic amnesty under the 2025 program.

Note:

Principal tax refers to the original amount of tax owed to KRA, before any interest, penalties, or fines are added.

2025 Tax Amnesty: An Overview

The 2025 tax amnesty was introduced through the Tax Procedures (Amendment) Act, 2024.

It offers relief on interest, penalties, and fines related to tax debts accrued up to 31st December 2023.

Effective period: 27th December 2024 – 30th June 2025.
Applicable to: Individuals and businesses with tax arrears (penalties, fines, interest).
Excludes: Principal taxes unpaid after 30th June 2025 or debts accrued after 31st December 2023.

Eligibility for 2025 Tax Amnesty

1. Taxpayers with No Principal Tax Arrears

If you have only accrued penalties, interest, or fines for periods up to 31st December 2023 and no principal tax is due, you qualify automatically.
No application is required.

2. Taxpayers with Outstanding Principal Tax

You must pay the full principal tax due for periods up to 31st December 2023 by 30th June 2025.
Applies to self-assessed, amended, or KRA-issued assessments –even if issued after 31st December 2023.
Taxpayers under dispute qualify if they settle or enter a payment agreement.

What Is Not Covered by the 2025 Tax Amnesty

The following are excluded from the 2025 tax amnesty:

Penalties, interest, or fines relating to periods after 31st December 2023.
Fines not related to tax debts (e.g., criminal penalties).
Unpaid principal tax not settled by 30th June 2025.
Taxes under dispute without a signed agreement.
Taxpayers with unresolved iTax system issues.

What does the 2025 Tax Amnesty Cover?

The 2025 tax amnesty applies to all tax heads under the Tax Procedures Act, 2015, including:

Income Tax
Value Added Tax (VAT)
Pay As You Earn (PAYE)
Withholding Tax
Excise Duty

As long as the tax debt was accrued up to 31st December 2023 and the principal tax is paid (if applicable), related penalties and interest may be waived.

2025 Tax Amnesty Application Process

Step-by-Step Guide:

Log into iTax: Access your KRA account at https://itax.kra.go.ke.
View Debt Status: The system will display all outstanding debts by tax head and period.
Select Eligible Periods: Choose tax periods that qualify for amnesty.
Pay Principal Tax: Settle in full or enter a payment plan with KRA.
Set Payment Frequency: Indicate how often you will pay (installments must end by 30th June 2025).
Accept Terms: Commit to the payment plan agreement.
Payments: Final amnesty approval happens only after the last installment is paid.

Note:

Individuals with no outstanding principal tax for the amnesty period will automatically qualify for the tax amnesty – no application is required.
A detailed user guide is available on the KRA website for further assistance.

Top 5 FAQs on the 2025 Tax Amnesty in Kenya

1. Who qualifies for the 2025 tax amnesty in Kenya?

You qualify if you:

Have no outstanding principal tax for periods up to 31st December 2023 – automatic qualification (no application needed).
Have principal tax due for that period – you must pay it in full by 30th June 2025 to benefit from the waiver of penalties and interest.

2. What taxes are covered under the 2025 tax amnesty?

The amnesty covers penalties, interest, and fines related to all tax heads under the Tax Procedures Act, including:

Income Tax
VAT
PAYE
Withholding Tax
Excise Duty

… as long as the tax debt arose on or before 31st December 2023.

3. What is not covered under the 2025 tax amnesty?

The following are excluded:

Tax debts accrued after 31st December 2023
Criminal fines unrelated to tax
Unpaid principal taxes not settled by 30th June 2025
Disputes without payment agreements
iTax system issues not resolved

4. How do I apply for the 2025 tax amnesty?

If principal tax is due, follow these steps:

Log into iTax
View eligible debts
Select qualifying periods
Pay the principal tax or set a payment plan
Complete payments by 30th June 2025

N/B: No application is required if no principal tax is due.

5. Can individuals like employees benefit from the amnesty?

Yes. For example, individuals who failed to file returns but whose employers remitted PAYE (like Miss Sydney) qualify automatically for amnesty if there’s no unpaid principal tax for the amnesty period.

Conclusion

The 2025 tax amnesty provides a valuable opportunity for Kenyan taxpayers to clean up their tax records and avoid future penalties.

Whether you’re an individual like Miss Sydney or a business owner, this amnesty offers a chance to become fully compliant without the burden of penalties and interest.

If you have any unresolved tax issues for periods up to 2023, act now. Ensure any principal tax is paid before 30th June 2025 to qualify for relief.

Need Help Filing?

At Quartet Consulting, we help taxpayers navigate Kenya’s tax system, file accurate returns, and benefit from the 2025 tax amnesty.

Don’t wait until penalties stack up. Contact us today and stay compliant.

Disclaimer

This article is for informational purposes only and does not constitute legal or tax advice. For personalized assistance, please consult a licensed tax professional or contact Quartet Consulting

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