Tax Amnesty 2026
KRA Tax Amnesty 2026: Full Waiver of Penalties and Interest
· Updated for Finance Act 2026
Deadline: 31 December 2026
This amnesty expires on 31 December 2026. After this date, all penalties and interest on pre-2026 tax debt become payable in full. KRA has confirmed this is a once-in-a-decade opportunity.
What Is the KRA Tax Amnesty 2026?
The KRA tax amnesty 2026, introduced under the Finance Act, 2026, is a time-limited programme that waives 100% of penalties, interest, and fines on qualifying tax liabilities accumulated up to 31 December 2025. It took effect on 1 July 2026 and closes on 31 December 2026.
This is the third amnesty cycle from KRA. The previous two cycles collectively recovered over KES 80.9 billion in principal tax payments while bringing hundreds of thousands of taxpayers back into compliance. The 2026 programme is expected to be the final broad-based amnesty for the foreseeable future.
Which Taxes Are Covered?
The amnesty covers penalties and interest on principal tax liabilities for all major tax types:
- Income Tax
- Value Added Tax (VAT)
- Pay As You Earn (PAYE)
- Withholding Tax
- Excise Duty
- Capital Gains Tax
- Monthly Rental Income Tax
- Turnover Tax
Important: Only penalties, interest, and fines on pre-2026 debt are waived. The principal tax must still be paid. Any tax liability arising on or after 1 January 2026 falls entirely outside the amnesty.
Who Qualifies for the Amnesty?
Five scenarios cover every taxpayer. Find yours below.
| Scenario | Condition | Action |
|---|---|---|
| Principal already paid | You cleared all principal tax by 31 Dec 2025 | Automatic waiver — no action needed |
| Late filing penalties only | You owe no principal tax, only late filing penalties | File outstanding returns → automatic waiver |
| Still owe principal — can pay lump sum | You have outstanding principal tax from before 2026 | Pay full principal by 31 Dec 2026 → waiver applied |
| Still owe principal — need instalments | Cannot pay the full principal at once | Apply for a payment plan on iTax → clear by 31 Dec 2026 → waiver applied |
| Ongoing tax dispute | You are in court or ADR over your tax liability | Settle principal through ADR → amnesty unlocked |
Step-by-Step: How to Apply on iTax
- Log in to the KRA iTax portal at itax.kra.go.ke
- Check your ledger — Go to the Returns menu and view your outstanding balances, penalties, and interest
- Reconcile your iTax ledger against your internal accounting records. Identify any discrepancies
- File outstanding returns — If you have unfiled returns, file them first. Late filing penalties will be waived automatically once returns are submitted
- Settle principal tax — Pay the outstanding principal in full, or navigate to Payments → Apply Payment Plan (new) to set up instalments
- Confirm waiver — Once principal is paid, the KRA system automatically applies the waiver. Check your ledger to confirm penalties and interest have been cleared
Note: If you have an ongoing tax dispute, you must pursue KRA's Alternative Dispute Resolution (ADR) framework to settle the principal amount before the amnesty can apply.
What the Amnesty Does Not Cover
- Principal tax: The original tax debt must still be paid in full
- Post-2025 liabilities: Any tax debt arising on or after 1 January 2026 is outside the amnesty entirely
- Active litigation: Taxpayers in active court disputes must use KRA's ADR framework to settle before amnesty benefits apply
Why This Matters for Your Business
Beyond the direct reduction in liabilities, clearing historical tax penalties has real operational benefits:
- Tax Compliance Certificate: KRA now requires a clean ledger before issuing a TCC. Resolving old debt unlocks access to government tenders, work permits, and business licences
- Avoid enforcement: Unresolved tax debt can lead to agency notices, bank account freezes, and property attachment. The amnesty is a genuine opportunity to avoid escalation
- Clean financial reporting: Unresolved liabilities distort your financial statements and make it harder to forecast cash flow or secure financing