Treasury announces six-month tax amnesty for outstanding arrears
Taxpayers with tax arrears accumulated up to December 31, 2025, will have a six-month window—from July 1 to December 31, 2026—to settle only the principal amount owed and qualify for a waiver.
The government has rolled out a six-month tax amnesty allowing taxpayers with outstanding tax arrears to clear their principal tax liabilities while enjoying a waiver on accumulated penalties and interest, Treasury Cabinet Secretary John Mbadi has announced.
The amnesty is one of the key provisions of the Finance Act, 2026, which came into effect on July 1. Under the new law, taxpayers with tax arrears accumulated up to December 31, 2025, will have a six-month window—from July 1 to December 31, 2026—to settle only the principal amount owed and qualify for a waiver of the associated penalties and interest.
Speaking during an interview with a local television station on Wednesday, Treasury Cabinet Secretary John Mbadi said the initiative is intended to provide relief to taxpayers who have struggled to meet their tax obligations due to financial and other challenges, enabling them to regularise their tax affairs.
He noted that many Kenyans have been unable to pay their taxes on time, resulting in the accumulation of substantial penalties and interest over the years.
"For various reasons, there are some Kenyans—taxpayers—who have not been able to pay their taxes on time. As a result, interest has accrued and penalties have been imposed," Mbadi said.
"This Act grants taxpayers with tax arrears up to 2025 a six-month tax amnesty beginning today until December 31, 2026, during which they will only be required to pay the principal tax owed," he added.
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Under the amnesty programme, eligible taxpayers who settle their outstanding principal tax within the stipulated period will have all related penalties, interest and qualifying non-compliance fines waived.
For example, a taxpayer who owes Sh100,000 in income tax for the 2025 tax year but has accumulated Sh30,000 in penalties and interest will only be required to pay the Sh100,000 principal. Upon payment within the amnesty period, the additional Sh30,000 will be written off.
Taxpayers who are unable to make a lump-sum payment can also apply for an Automated Payment Plan (APP) through the Kenya Revenue Authority's (KRA) iTax portal. Under the arrangement, applicants will be required to sign a payment commitment agreement and adhere to an approved repayment schedule in order to remain eligible for the amnesty.
To apply for the tax amnesty, taxpayers should log into the KRA iTax portal, navigate to the Debt and Enforcement section, select the Amnesty Application tab and follow the application guidelines. Those requiring assistance can visit the nearest KRA Tax Service Office (TSO) or a KRA help desk at any Huduma Centre.
The tax amnesty forms part of a broader package of relief measures introduced under the Finance Act, 2026, aimed at easing the tax burden on individuals and businesses, encouraging voluntary tax compliance and enhancing revenue collection without imposing additional financial strain on taxpayers.
The announcement comes shortly after the June 30 income tax filing deadline, during which KRA maintained that no extension would be granted despite heavy traffic on the iTax system.
Taxpayers who failed to file their returns by the June 30 deadline will still be required to pay the statutory late filing penalty of Sh2,000, as the newly introduced amnesty only applies to qualifying tax arrears and does not cover penalties for late filing of returns.
