If you’re a business owner staring at a mountain of old tax bills piled up from the tough years – maybe that slow season in 2022 or the supply chain chaos in 2023 -you’re not alone. We’ve all been there, juggling cash flow like it’s a matatu in rush-hour traffic, only to get hit with penalties and interest that feel like they’re growing faster than inflation.
But here’s the good news: the Kenya Revenue Authority (KRA) isn’t just knocking on your door with demands anymore. They’ve rolled out a tax amnesty program that’s like a reset button for your finances, wiping away those pesky extras so you can breathe easy and focus on growing your venture.
As of November 2025, this isn’t some dusty old policy – it’s active right now, running until June 30, 2025. Think of it as KRA saying, “We get it, times are hard. Pay what you actually owe, and we’ll forgive the rest.” Over 2.9 million taxpayers have already snagged waivers totalling Sh158 billion, and KRA’s pulled in Sh10.9 billion in principal payments to boot.
That’s real relief hitting real pockets – from mama mboga with her daily sales to the manufacturing firm in Industrial Area scraping by.
In this post, we’ll break it down like we’re chatting over nyama choma: what these amnesty programs are, who qualifies, how to jump in before the clock runs out and why it’s a no-brainer for local businesses. No jargon, just straight talk to help you reclaim your peace of mind.
A Quick History: From 2023’s First Wave to 2025’s Extension
KRA didn’t wake up yesterday and decide to play nice. This amnesty journey kicked off with the Finance Act 2023, launching the first program in September 2023. Back then, it covered penalties and interest on debts up to December 31, 2022.
Taxpayers who paid their principal (the actual tax owed) got an automatic wipeout of the add-ons – no applications, no hassle.
It ran until June 30, 2024, and boy, did it deliver: KRA waived Sh507.7 billion for 3.12 million folks and collected Sh43.9 billion in principals. That’s like forgiving a national debt party where everyone showed up with at least their cover charge.
But life didn’t stop in 2022. The economy kept throwing curveballs – post-election jitters, rising fuel costs, you name it. So, enter the Tax Procedures (Amendment) Act 2024, signed into law on December 11, 2024, and effective from December 27.
This extended the amnesty by six months and stretched coverage to debts up to December 31, 2023. It’s dubbed “Tax Amnesty 2.0” in some circles, and it’s all about giving struggling taxpayers (that’s most of us) a second shot. By April 2025, waivers had hit Sh158 billion, with more pouring in.
Why the extension? Simple:
KRA wants compliance, not collections through court battles. As Commissioner Rispah Simiyu put it, it’s about “helping taxpayers resolve past tax issues and regularize their tax compliance.”
In a country where SMEs make up 98% of businesses but often operate on razor-thin margins, this is less about revenue grabs and more about keeping the engine running.
Who Qualifies? It’s Easier Than You Think
Not everyone gets a free pass, but if you’ve got old debts lurking in your iTax portal, you’re probably in.
- The program targets penalties, interest, and fines on principal taxes (the core amount owed) for periods up to December 31, 2023.
- That means VAT slips from your shop’s slow months, PAYE shortfalls from layoffs, or corporate tax gaps from lean years – all covered, as long as the debt predates 2024.
Two main buckets of eligibility:
- Automatic Waiver Squad: If you’ve already paid all principal taxes due by December 31, 2023 (even if it was ages ago), you’re golden. Log into iTax, file any pending returns (including nil ones), and the system auto-wipes the penalties and interest. No forms, no fees – just compliance magic. This has been a boon for honest folks who paid up but got buried under interest snowballs.
- Payment Plan Pioneers: Got unpaid principals from that era? No sweat. Apply via iTax for amnesty and propose a structured plan to clear them by June 30, 2025. You can pay in lumps or instalments – whatever fits your cash flow – as long as it’s settled by deadline. KRA’s already approved plans for thousands, collecting billions along the way.
Exclusions? Debts from January 1, 2024, onward don’t qualify – fresh stuff stays punishable. Also, if you’re in a dispute or Voluntary Tax Disclosure Programme (VTDP), sort that first via Alternative Dispute Resolution (ADR).
Pro tip: Even if you’re not sure, check your ledger – better safe than sorry.
For local businesses, this is huge. Imagine a Nairobi hardware store owner who underpaid VAT in 2023 due to construction slumps. Pay the principal now, kiss goodbye to Sh500k in interest, and suddenly you’ve got breathing room for stock replenishment.
How to Apply: Step-by-Step (Because iTax Can Be a Maze)
KRA’s made this digital and straightforward – no queuing at Times Tower. Everything happens on iTax, their online portal.
Here’s your no-fluff guide:
- Log In and Check Your Ledger: Head to itax.kra.go.ke, punch in your PIN and password. Dive into “Debt & Enforcement” to see your outstanding balances. Note anything up to Dec 2023.
- File Pending Returns: Got unfiled returns? Do it now – even nil ones. This triggers auto-waivers if applicable.
- Apply for Amnesty (If needed): In the same tab, hit “Apply for Tax Amnesty.” Propose your payment plan – monthly chunks that add up by June 30, 2025. Upload any supporting docs if prompted (like bank statements for your plan’s realism).
- Pay Up: Use M-Pesa (Paybill 222222), bank transfer, or card. Track via iTax dashboard.
- Sit Back: Approval’s quick – often instant for autos, days for plans. Once paid, waivers hit automatically.
Stuck? Huduma Centres offer free help or call +254 791 292246. And hey, if you’re a business with complex books, loop in an accountant early – it’s worth the coffee money.
By early 2025, over 1.9 million had benefited, with Sh140 billion waived. Don’t sleep on this; the June deadline sneaks up fast.
Why Bother? The Real Wins for Businesses and Everyday Kenyans
This isn’t charity – it’s smart economics. For starters, a clean tax record unlocks doors: easier bank loans at lower rates, eligibility for government tenders, and no blacklisting that scares off partners.
Penalties can balloon a Sh1 million debt to Sh3 million; amnesty slashes that back, freeing cash for what matters – hiring that extra hand or upgrading your posho mill.
Take Jane, a fictional but oh-so-real caterer in Nakuru. She owed Sh2.5 million in VAT and PAYE from 2023’s downtrend. Pre-amnesty, interest was eating her alive. She applied, paid principals in four instalments, got Sh800k waived, and now she’s booking weddings without the dread. Stories like hers are everywhere – hardware yards in Eastlands, export firms in Mombasa – all breathing easier.
Broader picture? KRA’s collected billions in principals, boosting revenue without the stick. It’s a win-win: you regularize, economy grows.
But watch the pitfalls: Miss a payment? Plan collapses, penalties restart. And post-June, no mercy on old debts.
Wrapping Up: Act Now, Thank Yourself Later
KRA’s tax amnesty programs – from the 2023 original to this 2025 lifeline – are a rare gift in the tax world. With just seven months left until June 30, 2025, now’s the time to log in, assess and act.
“Tulipe Ushuru, Tujitegemee” (Pay taxes, be self-reliant) isn’t just a slogan – it’s your ticket to financial freedom.
Got questions? Hit me up at +254 791 292246 or info@sealassociates.com. And if you’re reading this as a business owner, share this with your network – let’s lift each other up.
What’s your amnesty story? Drop it in the comments. Here’s to clearer books and brighter tomorrows!