KRA Tax Amnesty 2026: What Kenyan Businesses Should Do Before 31 December

Tax & KRA Compliance Tax Updates

KRA Tax Amnesty 2026: What Kenyan Businesses Should Do Before 31 December

For Kenyan businesses with historical tax penalties, interest, unfiled returns or outstanding principal tax, KRA Tax Amnesty 2026 provides an important opportunity to clean up qualifying tax liabilities before the end of the year.

The Kenya Revenue Authority (KRA) confirms that the programme runs from 1 July 2026 to 31 December 2026 and provides a 100% waiver of qualifying penalties, interest and fines relating to tax liabilities and debts accrued on or before 31 December 2025, subject to the applicable conditions.

Important: Tax amnesty does not mean that KRA is cancelling the underlying principal tax. Where qualifying principal tax remains outstanding, it must be fully settled by 31 December 2026 for the related penalties, interest and fines to qualify for amnesty.

For business owners, the key question is therefore not simply, “Do I have penalties on iTax?”

The more useful question is: What does my tax ledger actually show, what qualifies for amnesty, and what needs to be resolved before 31 December 2026?

What Is KRA Tax Amnesty 2026?

Tax amnesty is a temporary relief programme that allows qualifying taxpayers to have certain interest, penalties and fines waived after meeting the prescribed conditions.

The current programme was introduced under the Finance Act 2026 through changes to Section 37E of the Tax Procedures Act. It extends the qualifying period to tax liabilities and debts accrued up to 31 December 2025.

KRA Tax Amnesty 2026 — Key Dates

Amnesty period: 1 July 2026 – 31 December 2026

Qualifying tax period: Tax liabilities and debts accrued on or before 31 December 2025

Final deadline: 31 December 2026

Tax liabilities arising from 1 January 2026 onwards do not qualify for this particular amnesty.

Who Qualifies for KRA Tax Amnesty 2026?

The programme can apply to several common situations. The treatment depends largely on whether principal tax remains outstanding and whether the relevant tax returns have been filed.

1. You Have Already Paid the Principal Tax

Suppose your business previously had an outstanding tax liability and you have already paid the principal amount, but your iTax ledger still contains qualifying interest, penalties or fines relating to periods up to 31 December 2025.

KRA states that taxpayers with no outstanding principal tax for qualifying periods can receive the applicable amnesty automatically. A separate amnesty application is not required in this situation.

2. You Still Have Outstanding Principal Tax

Businesses with principal tax outstanding for qualifying periods can also benefit from the amnesty. However, the qualifying principal tax must be fully paid by 31 December 2026 for the corresponding penalties, interest and fines to qualify.

The key distinction: The amnesty can remove qualifying penalties, interest and fines. It does not remove the principal tax itself.

3. You Have Unfiled Tax Returns

Some businesses may not immediately have a tax payment problem—they may first have a filing problem.

KRA states that taxpayers with outstanding returns for qualifying periods should file them during the amnesty period.

Where those returns result in no outstanding principal tax, qualifying late-filing penalties can be waived automatically. Where filing the returns produces principal tax payable, the principal amount must be fully settled by 31 December 2026 to obtain the applicable amnesty.

What If Your Business Cannot Pay the Principal Tax at Once?

An outstanding principal tax balance does not necessarily mean that the entire amount must be paid in one transaction. KRA provides options for taxpayers who need to settle qualifying principal tax during the amnesty period.

Option 1: Pay the Principal Tax in Full

A business can settle its qualifying outstanding principal tax in full during the amnesty period. Once the qualifying principal tax for the relevant period has been fully settled, the corresponding amnesty can be processed.

Option 2: Use an iTax Payment Plan

Businesses unable to make a one-off payment may use the payment-plan functionality available through iTax.

Remember: Entering into a payment plan does not extend the amnesty deadline. All qualifying principal tax included in the arrangement must still be fully cleared by 31 December 2026 to receive the amnesty.

Businesses considering this option should therefore assess their cash flow early rather than waiting until the final weeks of December.

Don’t Pay a Tax Debt You Haven’t Reconciled

This is one of the most important practical considerations for businesses using the amnesty.

An amount appearing on your iTax ledger should be investigated and reconciled against your records before you rush to make a payment.

A tax ledger difference could involve:

• A genuinely unpaid principal tax
• A missing or incorrectly allocated payment
• An unfiled return
• A return that requires amendment
• An assessment under objection
• An unresolved credit or overpayment
• Another historical ledger issue requiring reconciliation

KRA advises taxpayers who disagree with debts appearing for qualifying periods to select only the debts they agree with when generating payment or arranging the amnesty plan and to follow up on disputed amounts for resolution.

Practical takeaway: Reconcile your iTax ledger against filed returns, payment records and accounting records before deciding what should be paid.

What If You Have a Tax Dispute or Objection?

Having a tax dispute does not automatically prevent a taxpayer from benefiting from the programme.

KRA states that taxpayers undergoing objection or another dispute-resolution process can qualify, provided the matter is resolved and any resulting qualifying principal tax is fully paid before 31 December 2026.

For taxpayers already in active litigation, KRA also identifies Alternative Dispute Resolution (ADR) as a possible route through which qualifying principal tax matters may be settled.

The practical concern is time. If your business has unresolved assessments, objections, amendments or missing payments, waiting until the final weeks of December may leave insufficient time to resolve the issue and settle any principal tax that ultimately becomes payable.

Does Every Tax Debt Qualify?

No. Businesses should not assume that every penalty appearing on iTax will disappear.

The current tax amnesty applies to qualifying interest, penalties and fines imposed under tax laws covered by the Tax Procedures Act.

KRA specifically states that customs duties administered under the East African Community Customs Management Act (EACCMA) do not qualify under this programme.

In addition, liabilities, penalties and interest arising from 1 January 2026 onwards fall outside the qualifying period for KRA Tax Amnesty 2026.

The tax period, tax obligation, principal balance and nature of the liability therefore all matter when determining eligibility.

What Happens After You Qualify?

Once the applicable conditions have been met, KRA indicates that the amnesty is processed through iTax.

For eligible taxpayers, the ledger is credited with the amount of qualifying penalties, interest and fines being waived.

An Amnesty Certificate is then generated. KRA says the certificate is sent to the taxpayer’s iTax-registered email address and can also be accessed through the Consult and Reprint functionality in iTax.

Businesses should retain the certificate together with supporting tax records and evidence of the related payments.

What Should Kenyan Businesses Do Before 31 December 2026?

The biggest mistake would be treating 31 December as the date to start reviewing your tax position. Businesses should begin earlier.

1. Review Your iTax Ledger

Identify outstanding principal taxes, penalties, interest and fines across the business’s registered tax obligations.

2. Check for Missing Returns

Confirm whether all returns for qualifying periods have been filed. This may include relevant obligations such as VAT, PAYE, income tax or other taxes applicable to your business.

3. Reconcile the Ledger Against Your Records

Compare the amounts appearing on iTax with filed returns, payment records, bank transactions and your accounting system. Do not assume every historical balance is automatically correct.

4. Separate Qualifying and Non-Qualifying Periods

Separate liabilities relating to periods up to 31 December 2025 from liabilities arising from 1 January 2026 onwards.

5. Resolve Disputed or Incorrect Balances Early

Where there are missing payments, assessments under dispute, unresolved amendments or other discrepancies, begin resolving them well before the deadline.

6. Determine How You Will Settle Principal Tax

If qualifying principal tax is genuinely outstanding, determine whether the business can make a lump-sum payment or requires a payment arrangement.

7. Confirm That the Amnesty Has Been Processed

After meeting the conditions, check your tax ledger and obtain the Amnesty Certificate. Do not simply make a payment and assume everything has been resolved.

Why Businesses Should Not Wait Until December

Tax cleanup is not always as simple as making one payment.

A business may discover:

• Several years of unfiled returns
• Unexplained tax ledger balances
• Missing payments
• Incorrect tax obligations
• Historical assessments
• Disputed amounts
• Return amendments requiring resolution
• Principal tax that requires cash-flow planning

Some of these issues may require interaction with KRA before they can be resolved. The earlier a business reviews its position, the more time it has to understand the actual exposure and determine the appropriate course of action.

Frequently Asked Questions About KRA Tax Amnesty 2026

Does KRA Tax Amnesty 2026 cancel my principal tax?

No. The amnesty applies to qualifying penalties, interest and fines. Where qualifying principal tax remains outstanding, it must be fully paid by 31 December 2026 to receive the corresponding amnesty.

When does KRA Tax Amnesty 2026 end?

The programme ends on 31 December 2026.

Which tax periods qualify?

Qualifying tax liabilities and debts accrued on or before 31 December 2025 are covered, subject to the programme’s conditions. Tax liabilities arising from 1 January 2026 onwards do not qualify.

Can I qualify if I have not filed some returns?

Yes. Outstanding returns for qualifying periods can be filed during the amnesty period. If no principal tax becomes payable, qualifying late-filing penalties may be waived automatically. If principal tax arises, it must be fully settled by the deadline for the applicable amnesty.

Can I pay outstanding principal tax in instalments?

KRA provides an iTax payment-plan option. However, the qualifying principal tax must still be fully cleared by 31 December 2026 to obtain the amnesty.

Do I need to apply if I already paid all the principal tax?

Where all qualifying principal tax has already been paid and only qualifying penalties, interest or fines remain, KRA states that the amnesty can be processed automatically without a separate application.

What happens if I miss the deadline?

If the applicable amnesty conditions have not been satisfied by the end of the programme, outstanding amounts may remain recoverable under the normal tax collection provisions.

A Tax Amnesty Is Also an Opportunity to Clean Up Your Records

For a business, the value of this exercise should go beyond removing penalties.

If historical tax balances have accumulated because bookkeeping, reconciliations and tax filings were not maintained consistently, clearing the iTax ledger without fixing the underlying process may only postpone the problem.

This is therefore a useful time to review whether:

• Bookkeeping records are complete
• Bank accounts are regularly reconciled
• Tax returns agree with accounting records
• VAT and payroll records are properly maintained
• Payments to KRA are correctly captured
• Outstanding tax balances are reviewed regularly
• Management has visibility over upcoming tax obligations

Good tax compliance starts with reliable financial records.

NEED HELP REVIEWING YOUR TAX POSITION?

Get Your Tax Records in Order Before the Deadline

If your business has historical tax balances, penalties, missing returns or amounts on iTax that you do not fully understand, start by establishing the correct position.

Oswago & Associates can assist with reviewing tax ledgers, reconciling historical records, identifying outstanding returns and principal tax balances, and preparing a practical compliance plan before the tax amnesty deadline.

Book a Financial Review

Source & Update Note

This article reflects Kenya Revenue Authority guidance available as of 7 October 2026 and is intended as general business information. Tax treatment depends on the taxpayer’s individual circumstances, tax obligations and records.

Official source: Kenya Revenue Authority — 2026 Tax Amnesty Programme