The Finance Bill 2026 brings mixed news on tax amnesty. While the deadline has been extended, the overall relief has been tightened.
Key Changes
- Extended Deadlines: Principal tax liabilities up to 31 December 2025 can now be declared until 31 December 2026. Penalties and interest relief will also run until the same date.
- Narrowed Scope: The repeal of Section 44A removes a previous broad relief provision. Section 49 eliminates the ability to waive VAT on imports under the amnesty.
This means the window to regularise old taxes is longer, but the available benefits are smaller than many businesses expected.
Quantitative Impact
| Item | Previous Amnesty | Finance Bill 2026 Position | Change for Businesses |
| Amnesty Deadline | Shorter window | Extended to 31 Dec 2026 | +12 months |
| Principal Tax Relief | Available | Still available | No change |
| Penalties & Interest Waiver | Broad relief | Narrowed | Reduced relief |
| VAT on Imports | Could be waived | No longer waivable | Higher cost on imported goods |
Real Implications
For a business with KSh 12 million in old VAT liabilities plus KSh 8 million in penalties, the extended deadline gives more time to pay.
However, losing the import VAT waiver and the repealed relief provision means many will pay more than they hoped.
Small importers and manufacturers who relied on full VAT waivers during previous amnesties will feel this tightening most.
What Businesses Should Do Now
- Review your iTax ledger for liabilities up to December 2025.
- Calculate the realistic cost under the new narrowed terms.
- Engage a tax advisor early to prepare a strong application.
- Budget for higher potential payments, especially on imports.
The amnesty still offers meaningful relief, particularly on penalties, but the narrowed scope reduces its value compared to earlier expectations.
Businesses with significant historical liabilities should act quickly while the window remains open.
Prepared by Seal Associates Tax Advisory Team