The Finance Act 2023 introduced a tax amnesty program for interest and penalties on tax debt by inserting section 37E into the Tax Procedures Act 2015. The amnesty took effect on September 1. Through the programme, taxpayers without outstanding principal tax for the period to December 31, 2022, but who have penalties and interest qualify for the waiver. The taxpayers, who have outstanding principal tax to that period but commit to paying the tax by June 30 2024, also qualify for the tax amnesty. Qualified taxpayers will be entitled to automatic waiver of the penalties and interest related to that period and won’t be required to make an amnesty application.
As provided in section 37E (2) of the Act, where all the principal tax due had not been paid before the 31st December, 2022, a person shall apply to the Commissioner for an amnesty of interest or penalties on the unpaid tax, and propose a payment plan for the outstanding amount. For this purpose, the amnesty shall be on interest or penalties on the unpaid tax that have accrued up to the 31st December, 2022. It shall only be granted once if the person applies for amnesty and pays all the outstanding principal taxes not later than the 30th June 2024; does not incur a further tax debt; and signs a commitment letter for the settlement of all outstanding taxes that the person may owe.
Kindly note that any amount of principal tax as at 31st December, 2022 that remains unpaid on the 30th June, 2024, shall attract interest and penalties for which no amnesty shall be granted under section 37..
Date: November 3rd, 2023 By: Kevin Muthuni.
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