Thousands of Kenyans have been left anxious after the June 30 deadline for filing 2025 annual tax returns passed while many were still unable to submit their returns because of disruptions affecting the Kenya Revenue Authority (KRA) online system.
Although the filing period has ended, many taxpayers are now hoping that a new tax amnesty introduced under the Finance Act, 2026, will help reduce the financial burden caused by late filing.
Under the current law, taxpayers who failed to file their annual returns by the June 30 deadline will still face the standard Ksh2,000 late filing penalty.
The penalties begin to apply immediately after the deadline, even for taxpayers who experienced technical difficulties while trying to access the KRA system during the final days of filing.
KRA acknowledged that its online system experienced disruptions that affected many users during the filing period. However, by the time of publication, the authority had not announced whether the system had been fully restored or whether it would extend the filing deadline because of the technical challenges. Instead, the authority has encouraged taxpayers to continue following its official communication channels for updates, particularly regarding the implementation of the new tax waiver programme.
The new tax amnesty officially took effect on July 1, 2026, following the implementation of the Finance Act, 2026. The law gives eligible taxpayers an opportunity to regularise their tax affairs by allowing penalties, interest and certain non-compliance fines to be waived once the outstanding principal tax has been fully paid within the prescribed period.
This means that although many Kenyans are now facing late filing penalties, they may later benefit from the waiver if KRA confirms that the penalties qualify under the new amnesty programme.
The authority is expected to provide detailed guidance on how eligible taxpayers will benefit from the waiver in the coming days.
The tax amnesty applies to tax liabilities that arose on or before December 31, 2025. Taxpayers who have unpaid taxes from previous years can qualify for the waiver if they first settle the actual tax owed, commonly known as the principal tax, before the deadline provided under the programme.
Unlike previous arrangements where taxpayers were expected to clear penalties and interest before resolving their tax matters, the new framework allows taxpayers to pay only the principal amount first. Once that payment has been made within the required timeline, KRA is expected to waive the related penalties, accumulated interest and eligible non-compliance fines.
For example, if someone owed Ksh100,000 in income tax for the year 2020 and the unpaid amount later attracted Ksh30,000 in penalties and interest, paying the original Ksh100,000 within the amnesty period would make that taxpayer eligible for the waiver of the additional Ksh30,000.
The extension of the tax amnesty was first proposed by the National Treasury in the Finance Bill, 2026. The proposal sought to extend the amnesty window until December 2026, giving taxpayers more time to clear outstanding tax arrears without carrying the burden of penalties and interest. Parliament later passed the bill before President William Ruto signed it into law, making the changes effective.
Tax experts are advising them not to wait until the last minute. Instead, they recommend reviewing tax records through the KRA iTax system to determine whether there are any outstanding principal tax obligations.
Those who identify unpaid taxes are encouraged to settle the principal amount within the required timeline while closely following KRA’s official guidance on how the waiver process will be implemented for eligible accounts.
For many Kenyans, the new tax amnesty offers a chance to correct past tax issues and reduce additional financial penalties. However, taxpayers will still need to act within the timelines provided and follow KRA’s instructions to fully benefit from the programme once the authority announces the detailed implementation process.
