Hey, Kenyan business warrior – picture this: It’s a quiet Friday evening in your Kisumu warehouse or that bustling Westlands café you poured your life savings into. You’re finally catching up on emails when ping – another iTax reminder about that nagging VAT shortfall from 2022. Or maybe it’s unreported income from those side gigs that kept the lights on during the tough months. Your heart sinks because you know the penalties and interest are piling up like Nairobi traffic at 5 PM. You’re not a tax dodger; life’s just been a grind, and now KRA’s got you in their sights.
Sound familiar? If you’re nodding, pull up a chair. The Kenya Revenue Authority’s (KRA) Voluntary Tax Disclosure Programme (VTDP) is like that trusted mechanic who fixes your matatu without judgment – just pay the core bill, and they wave the extras.
Launched under the Finance Act 2020 and effective from January 1, 2021, VTDP lets you confidentially fess up to past slip-ups, pay the principal tax owed, and get 100% relief on penalties and interest.
No prosecution, no endless audits – just a clean ledger and a certificate to prove it.
As of November 2025, VTDP is still your go-to for historical non-compliance, even as the tax amnesty window closes on June 30, 2025.
It’s automated on iTax now, making it easier than ever to apply without trekking to Times Tower.
Over the years, it’s pulled thousands out of the shadows, boosting compliance and KRA’s coffers without the big stick.
For local entrepreneurs like you – running a hardware store in Eldoret or exporting coffee from Meru – this could mean reclaiming cash flow instead of watching it bleed to fines.
In this guide, we’ll unpack what VTDP really is, why it’s a lifeline for SMEs, who qualifies (spoiler: most folks with old skeletons), and a dead-simple step-by-step to get you sorted. Let’s turn that tax dread into done-deal relief.
VTDP 101: What It Is and Why KRA Rolled It Out
At its core, VTDP is KRA’s olive branch for taxpayers who’ve flown under the radar – intentionally or not.
It’s a confidential program where you disclose previously unreported or underreported tax liabilities (think VAT, PAYE, corporate income tax, withholding tax, excise, or even customs duties).
In exchange for coming clean and paying the principal (the actual tax owed), KRA grants full relief on penalties and interest – no questions asked, no partial deals.
This isn’t new; it kicked off in 2021 to drag folks out of the informal economy and into compliance without fear.
Commissioner Rispah Simiyu has been vocal about it: “Declare your undeclared taxes now and avoid the audit hammer.” By 2025, with iTax automation, applications are a breeze – submit online, get an ack slip, and watch the relief roll in within 30 days.
Key perks?
- Immunity from Prosecution: No jail time or fines for what you disclose.
- Flexible Payments: Up to 36 months to settle the principal, tailored to your cash flow.
- Clean Record: That VTDP certificate? It’s your golden ticket for tax compliance certificates, loans, and tenders – no more red flags.
It’s different from the tax amnesty (which auto-waives on paid principals up to 2023) or the new Automated Payment Plan (for spreading full debts).
VTDP is for voluntary confessions of hidden stuff, giving you control before KRA knocks.
Why VTDP is a Game-Changer for Everyday Kenyan Businesses
Let’s get real: Kenya’s economy is a rollercoaster – COVID hangovers, fuel hikes and that endless quest for reliable power.
Many SMEs (that’s 98% of us) have skimped on filings to survive, not to scam. Enter VTDP: It’s not about shaming; it’s about second chances.
Take Mama Grace, a fictional but spot-on fruit vendor in Mombasa. She underreported turnover tax in 2022 to cover family medical bills – now owes KSh 800k principal plus KSh 1.2 million in penalties.
Under VTDP, she discloses, pays the KSh 800k over 12 months, and poof – penalties vanish. Suddenly, she’s tender-eligible for market stalls and sleeping without audit nightmares.
Or consider a mid-sized manufacturing outfit in Thika: Unreported export incentives led to a KSh 5 million corporate tax gap.
VTDP lets them settle the principal in instalments, snag that compliance cert and chase bigger contracts without the debt drag.
The bigger win? Compliance builds trust. Banks lend easier, partners commit, and you join the formal economy where grants and protections flow.
KRA’s seen uptake soar post-automation – thousands regularized, revenue up without coercion.
In a world eyeing CRS (automatic global info-sharing by 2026), staying clean now dodges international headaches later.
But heads up: It’s confidential only if you’re first to disclose. If KRA’s already auditing you, VTDP’s off the table- relief denied. And fibbing on facts? They can yank the relief and hit you harder.
Who Qualifies? The No-Nonsense Eligibility Check
VTDP’s open to anyone with undisclosed liabilities – no minimum amount, no taxpayer type excluded (individuals, companies, partnerships – all in).
Covers all heads: income tax, VAT, PAYE, etc., from any period before you apply.
Must-haves:
- Voluntary & Pre-Audit: Disclose before KRA contacts you about it.
- Full Disclosure: Spill everything accurately – no half-truths.
- Payment Commitment: Propose a realistic plan (lump sum or up to 3 years).
Doesn’t cover: Refunds, ongoing disputes, or post-disclosure non-compliance (keep filing on time!).
If you’ve got KRA letters urging VTDP, that’s your cue – they’ve flagged you but haven’t audited yet.
How to Apply: Your 5-Step iTax Roadmap (Takes Under 30 Minutes)
KRA’s digitized this – no more paper trails. Everything’s on iTax since the 2023 automation rollout. Here’s the hustle:
- Prep Your Books: Review ledgers, calculate principal owed (use KRA’s VTDP calculator if available). Gather docs like bank statements.
- Log into iTax: Hit itax.kra.go.ke, PIN/password ready? Good.
- File the VTDP Return: Go to “Returns” > Select tax head > Choose “VTDP” form. Disclose amounts, periods, and reasons confidentially.
- Propose Payment Plan: Suggest instalments (e.g., 12-36 months). Submit – get instant ack slip.
- Pay & Certify: Remit via M-Pesa (222222), bank, etc. Full payment? VTDP certificate emails in days. Relief auto-applies.
Amend once if needed, but appeal denials to the Tax Appeals Tribunal. Stuck? Huduma Centres or KRA hotline (020 499 9999) got you.
Pro tip: Loop in a tax pro for complex cases – better than winging it.
VTDP vs. Amnesty & APP: Quick Comparison for the Overwhelmed
| Feature | VTDP (Voluntary Disclosure) | Tax Amnesty (2023-2025) | APP (Automated Payments) |
| Best For | Hidden/underreported taxes, pre-audit | Paid principals up to 2023, auto-waive extras | Spreading full current debts (no waiver) |
| Relief | 100% penalties/interest on principal paid | Auto-waive on old paid debts | Instalments up to 6 months, enforcement pause |
| Timeline | Ongoing, anytime before audit | Ends June 30, 2025 | Rolling, apply anytime |
| Catch | Must disclose voluntarily | No disclosure needed if paid | Full amount due, miss payment = collapse |
The Bottom Line: Disclose Today, Thrive Tomorrow
Fellow entrepreneur, VTDP isn’t just relief – it’s your bridge to sustainable growth.
In Kenya’s cutthroat market, a spotless tax record means access to capital, contracts, and calm nights.
With global eyes on transparency via CRS looming, now’s the moment to act before KRA’s data nets tighten.
“Tulipe Ushuru, Tujitegemee” rings truer here: Pay right, build strong.
Got a VTDP win or question? Spill in the comments – let’s swap stories. For tailored help, hit me up at info@sealassociates.com or KRA’s VTDP FAQs. Here’s to your comeback!