The volume of tax debts waived under the Kenya Revenue Authority (KRA) amnesty plan hit Sh165 billion between last December and April as businesses and individuals rushed to take advantage of the window before it closes on June 30.
The KRA says more than three million taxpayers with overdue obligations have taken up the amnesty offer initially rolled out between September 2023 and June 2024, before the second phase opened last December.
The second phase of the tax forgiveness plan covers penalties, interest and fines accrued up to December 2023, providing a waiver of these charges if a taxpayer settles the principal tax by June 30, 2025.
“The Tax Amnesty Programme has seen strong uptake, generating Sh13.5 billion in revenue between December 2024 and April 2025. KRA has waived Sh164.9 billion in penalties and interest, benefiting over three million taxpayers,” said the KRA in a statement last Thursday.
Under the programme, taxpayers who did not have principal arrears at the end of December 2023 automatically saw their accumulated interest and fines waived.
Those with arrears on principal tax obligations have had the option of entering into a payment plan with the KRA upon application, but are also required to clear this principal debt by the end of June 2025 in order for their penalties to be written off.
The initial phase of the amnesty saw the KRA write off accumulated penalties and interest worth Sh508 billion for taxpayers who settled principal arrears for the period up to December 2022.
The amnesty is one of the various tools and policies that the KRA has been employing to draw more taxpayers into the tax net through voluntary compliance, while also providing relief to businesses or individuals weighed down by past tax debts.
Others include the implementation of a Centralised Release Office to improve cargo clearance and Customs revenue performance.
The KRA also rolled out the Electronic Rental Income Tax System to help landlords with the filing of rental income taxes, while also providing them with tools for property registration and tenancy management.
These efforts to widen the tax base helped the KRA grow its tax collection by 3.6 percent to Sh1.91 trillion in the 10 months to April 2024, despite tough economic conditions, which slowed down private sector activity, imports and exports.
The taxman netted a further Sh205.52 billion in agency fees (revenue collected on behalf of other government agencies), bringing the total revenue in the period to Sh2.11 trillion. Unlike the Exchequer revenue, however, agency collections were 11.8 percent above the prorated target of Sh183.8 billion for the period.
Domestic taxes, which include excise duty, income tax and VAT, were up by 4.7 percent to Sh1.39 trillion compared to the corresponding period in the 2023-24 financial year, while customs revenue grew by 9.1 percent to Sh722.74 billion.
The collections came amid challenges in the domestic business sector that saw credit to the private sector grow by a marginal 0.2 percent in March 2025, from a contraction of 1.3 percent in February.
The ratio of gross non-performing loans (NPLs) to gross loans also expanded to hit 17.2 percent in February 2025 compared to 16.4 percent in December 2024, with real estate, personal and household, trade, building and construction, and manufacturing sectors the worst hit.
There was also a 3.6 percent fall in key export earnings, driven by a decline in key sectors such as tea (–18.6 percent) and horticulture (–6.2 percent) in the period.
