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Tax Amnesty Kenya 2026: How the 100% Waiver Works

📅 12 August 2026 · ✅ Last verified: 12 October 2026 · 📖 11 min read · Tax & KRA
Black Kenyan business owner reviewing a tax amnesty records folder, calendar, checklist, and calculator
Original editorial artwork; no official interface or endorsement depicted.

The Finance Act, 2026 re-introduced the tax amnesty under Section 37E of the Tax Procedures Act, and KRA has launched it as the 2026 amnesty programme: a 100% waiver of penalties, interest and fines on tax liabilities outstanding up to 31-12-2025 — available from 01-07-2026 to 31-12-2026. If you owe KRA and have been carrying penalties and interest, this window is your chance to clear the debt at the principal amount only.

Before you rely on this: amnesty mechanics (tax heads covered, disputed debt, already-paid interest) are set by the Finance Act 2026 and KRA's published notice — confirm your exact position in iTax or get KRA's written position before acting. This guide is general information, not tax advice.
The deal in one line: pay the principal tax you owe (from periods up to 31-12-2025) during the amnesty window, and KRA waives 100% of the associated penalties, interest and fines.

1. What the amnesty covers

  • 100% waiver of penalties, interest and fines on qualifying tax liabilities (per KRA's published amnesty terms under the Finance Act 2026).
  • Applies to tax debts accrued up to 31-12-2025 (penalties, interest and fines on those debts).
  • Available for taxes administered by KRA — income tax, VAT, excise duty and other KRA-collected taxes (confirm your specific tax head in the iTax amnesty module).

2. What it does NOT cover

  • The principal tax amount is still payable — the amnesty waives the extras, not the tax itself.
  • Liabilities arising after 31-12-2025 are outside the amnesty.
  • The window runs 01-07-2026 – 31-12-2026 — after that date, standard penalties and interest rules return.

3. How to apply

  1. Log in to iTax and review your outstanding returns and assessments.
  2. File any outstanding returns for the affected periods.
  3. The amnesty is automated; no separate amnesty application is required. If you need a payment plan, use the iTax payment-plan feature and follow KRA's current guidance.
  4. Pay the remaining principal. KRA has indicated flexible payment plans are available — request a plan if you cannot pay the full principal at once.

4. Eligibility at a glance

In scopeOut of scope
Penalties, interest and fines on qualifying liabilities (periods up to 31-12-2025)The principal tax itself — still payable
Taxes administered by KRA covered by the amnesty termsLiabilities arising after 31-12-2025
Qualifying principal paid within the window (01-07-2026 – 31-12-2026)Anything applied for after the window closes

Worked example

Principal KES 400,000 + penalties and interest KES 180,000 = KES 580,000 outstanding. Under the amnesty: penalties and interest waived, you pay the KES 400,000 principal (subject to KRA's published terms for your tax head).

5. Why it matters for your business

Carrying old liabilities is expensive: penalties and simple interest can accumulate quickly and can exceed the original tax. The amnesty lets you reset that position at a known cost. After the window closes, any remaining old liabilities keep accruing penalties and interest at the standard rates — and KRA enforcement (agency notices, garnishees, eTIMS compliance pressure) continues regardless.

6. Common mistakes

  • Assuming it covers 2026 tax. It covers liabilities up to 31-12-2025 only — keep filing and paying current-period tax normally.
  • Waiting for the last day. Applications and payment plans take processing time; start early in the window.
  • Ignoring outstanding returns. The amnesty works through filed returns — unfiled returns must be filed first.

Frequently Asked Questions

Does the 100% amnesty mean I don't pay the tax at all?

No. The amnesty waives 100% of the penalties, interest and fines. The principal tax is still payable.

I have a KRA payment plan for old debt. Can I still use the amnesty?

The amnesty is designed to work with payment plans — confirm your position in iTax or with KRA, since the waiver applies to the eligible penalties and interest on your outstanding balance.

What if my liability arose in January 2026?

It is outside the amnesty (periods up to 31-12-2025 qualify). Pay it normally to avoid building new penalties.

Is this the same as the earlier amnesty?

The Finance Act 2026 window is a fresh, 100% waiver — more generous than earlier partial waivers. Confirm your exact case with KRA.

Related Guides

⚠️ Disclaimer: General information, not tax advice. Amnesty rules and qualifying periods are set by the Finance Act 2026 and KRA guidance; the process is automated, while payment-plan mechanics can change. Confirm your specific position with KRA before relying on this guide. See the source-check dates below.

Sources and update record

Updated 26 October 2026: Corrected the Swahili description of interest to simple interest under the Tax Procedures Act.