- The 2026 amnesty runs from 1 July to 31 December 2026 and covers penalties, interest and fines on tax liabilities for periods up to 31 December 2025 (as at October 2026).
- Only penalties, interest and fines are waived. The principal tax must be paid in full by 31 December 2026, either as a lump sum or through an iTax payment plan that clears it by that date.
- Relief is automatic, with no application needed, where the principal was fully paid by 31 December 2025, or where no principal is due and the missing returns are filed within the amnesty window.
- Liabilities for periods from 1 January 2026 do not qualify, and customs duties under the EAC Customs Management Act are excluded. Penalties and interest under the Tax Procedures Act, including on income tax, VAT, PAYE, withholding tax and excise duty, can qualify.
- Since 1 January 2024, business expenses generally need an eTIMS invoice to be deductible (some categories are exempt), and from 1 January 2026 KRA validates expenses declared in income tax returns against eTIMS records. Disallowed expenses raise the principal you must pay, so reconcile your records first.
Tax penalties and interest can quickly spiral into unmanageable liabilities for Kenyan businesses. With evolving compliance frameworks such as eTIMS and the end, on 1 July 2025, of penalty and interest waivers on grounds other than system error or wrong obligation, the Kenya Revenue Authority (KRA) is increasingly relying on automated systems to flag and penalise non-compliance.
However, tax amnesty programmes—combined with structured relief such as a KRA iTax payment plan—offer a strategic opportunity for businesses to regularise their tax affairs without bearing the full burden of accumulated penalties.
This guide provides a practical, step-by-step advisory on how to apply for KRA tax amnesty and leverage available relief options in 2026.
2026 amnesty at a glance (as at 28 October 2026): the Finance Act 2026 amended section 37E of the Tax Procedures Act to re-open the tax amnesty from 1 July 2026 to 31 December 2026. It waives 100% of penalties, interest and fines on tax liabilities for periods up to 31 December 2025, provided the principal tax is paid in full by 31 December 2026. Liabilities for periods from 1 January 2026 do not qualify, and customs duties under the EAC Customs Management Act are excluded. See KRA’s 2026 Tax Amnesty Programme at a Glance.
What Is KRA Tax Amnesty and Who Qualifies?
Quick Advisory:
The 2026 KRA tax amnesty waives 100% of penalties, interest and fines on tax owed for periods up to 31 December 2025, provided the principal tax is paid in full by 31 December 2026. To qualify, file all outstanding returns and pay the principal in full by 31 December 2026.
KRA tax amnesty is a relief mechanism designed to encourage voluntary compliance by allowing taxpayers to settle outstanding principal taxes while applying for the waiver of accrued penalties and interest.
Key Eligibility Criteria
To qualify for tax amnesty in Kenya, businesses must:
- File all outstanding tax returns
- Declare accurate tax liabilities
- Pay the principal tax in full by 31 December 2026, either as a lump sum or through an iTax payment plan that clears it by that date
- Where relief is not applied automatically, apply through the Amnesty application tab under Debt and Enforcement on iTax (no application is needed if the principal was fully paid by 31 December 2025, or if no principal is due and the missing returns are filed within the amnesty window)
Adamjee Advisory Insights (2026)
- With eTIMS now central to expense validation, expenses without the required eTIMS support can be disallowed, which raises the principal tax that must be paid before penalties and interest are waived.
- KRA’s data-matching (eTIMS, withholding tax and customs records) increases the risk of detection—making proactive compliance essential.
- Businesses with incomplete records should first regularize bookkeeping via professional support such as bookkeeping services.
What Types of Taxes Are Covered Under Amnesty?
Quick Advisory:
Most tax types—Income Tax, VAT, PAYE, and Withholding Tax—can qualify for amnesty, but only penalties and interest are waived. The principal tax must always be settled.
KRA tax amnesty typically applies to:
| Tax Type | Covered Under Amnesty | Notes |
|---|---|---|
| Income Tax | Yes | Includes corporate and individual |
| VAT | Yes | Must align with eTIMS records |
| PAYE | Yes | Employer compliance required |
| Withholding Tax | Yes | Must reconcile supplier records |
| Excise Duty | Yes | Penalties and interest under the Tax Procedures Act qualify; customs duties under the EAC Customs Management Act do not |
Important Limitation
- Amnesty does NOT eliminate the principal tax liability
- False declarations may lead to audits and further assessments
Adamjee Advisory Insights
From 1 January 2026, KRA validates income and expenses declared in income tax returns against eTIMS, withholding tax and customs import records. Businesses applying for amnesty must ensure:
- All VAT claims are backed by valid eTIMS invoices
- Input tax claims are legitimate and verifiable
For VAT-related corrections, consult tax compliance advisory services.
Step-by-Step: How to Apply for KRA Tax Amnesty Online
Quick Advisory:
Where relief is not automatic, apply on iTax through the Amnesty application tab under “Debt and Enforcement”, and pay the principal by 31 December 2026. Ensure all returns are filed and principal tax computed before applying.
Step 1: Log into iTax
Access your KRA iTax account via the official portal.
Step 2: File All Outstanding Returns
- Ensure zero outstanding filings
- Amend incorrect returns where necessary
Step 3: Determine Outstanding Principal Tax
- Reconcile tax ledgers
- Confirm figures against financial statements
Step 4: Pay the Principal in Full or Through a Payment Plan
- Pay the principal tax in full, or set up a payment plan in iTax (Payments → Apply Payment Plan) that clears the principal by 31 December 2026. When generating the payment slip, adjust the amount to principal only, as iTax may include penalties and interest
Step 5: Apply for the Amnesty Where Relief Is Not Automatic
- Navigate to “Debt and Enforcement” → “Amnesty application” (the general “Apply for Waiver” route is limited to system errors or wrong obligations; other waiver grounds ended on 1 July 2025)
- Select only the periods you agree with; take disputed periods to your Tax Service Office with supporting documents
Step 6: Check Your Ledger and Amnesty Certificate
- Check that the waived penalties and interest have been credited to your iTax ledger
- Once the principal for a period is paid, KRA credits the ledger and emails an amnesty certificate, which you can also download under Consult and Reprint
How a KRA Payment Plan Supports the Amnesty
Quick Advisory:
If you cannot pay the principal tax in full, set up a payment plan on iTax to spread payments while still qualifying for penalty relief. The plan only qualifies if the full principal is cleared by 31 December 2026 (KRA allowed a maximum of six instalments for plans applied for in July 2026).
An iTax payment plan allows businesses to:
- Structure tax repayments over time
- Avoid enforcement actions
- Qualify for the amnesty, provided the plan clears the principal by 31 December 2026
Benefits of a Payment Plan
- Improved cash flow management
- Reduced risk of enforcement (agency notices, asset seizure)
- Lets you settle the principal in instalments rather than a lump sum
Adamjee Advisory Insights
Businesses using a payment plan with the amnesty should set realistic instalments that clear the principal before 31 December 2026, supported by:
- Accurate financial projections
- Strong audit trails
- Professional representation
For structured financial planning, explore CFO advisory services.
Common Mistakes That Can Stop the Amnesty Applying
Quick Advisory:
Incomplete filings, inaccurate disclosures and unsupported expenses can delay relief or increase the principal you must pay. KRA systems now detect inconsistencies automatically.
Key Mistakes to Avoid
- Unfiled Returns
Even one missing return can invalidate your application - Incorrect Tax Computations
Leads to reassessment and delays - Lack of Supporting Documents
Especially critical under eTIMS - Ignoring eTIMS Compliance
- Expenses without eTIMS invoices are generally disallowed
- May increase principal tax payable
- Failure to Pay Principal Tax
Penalties and interest are waived only when the principal is fully paid by 31 December 2026; unpaid amounts become fully recoverable after that date
How eTIMS Impacts Tax Amnesty Applications in 2026
Quick Advisory:
Since 1 January 2024, business expenses generally need an eTIMS invoice to be deductible (some categories are exempt), and from 1 January 2026 KRA validates expenses declared in income tax returns against eTIMS records. Disallowed expenses raise the principal tax, which must be paid before penalties and interest are waived. Ensure all transactions are properly validated before submission.
eTIMS (electronic Tax Invoice Management System) is now central to KRA’s compliance framework.
Implications for Amnesty
- Invalid expenses increase taxable income
- VAT claims without eTIMS invoices are rejected
- KRA validates declared expenses against eTIMS records when returns are filed
Adamjee Advisory Insights
Before applying for amnesty:
- Conduct a full eTIMS compliance audit
- Reconcile supplier invoices
- Clean up historical tax records
Professional audit support can be accessed via audit and assurance services.
When Should You Apply for Tax Amnesty?
Quick Advisory:
The 2026 amnesty closes on 31 December 2026. File outstanding returns and pay the principal before then; after that date, penalties and interest on unpaid principal become fully recoverable. Allow time to resolve any disputed periods before the deadline.
Ideal Timing
- After financial year reconciliation
- Before KRA audit triggers
- When cash flow allows principal repayment
Warning Signs You Should Apply Now
- Receiving KRA demand notices
- Growing penalties and interest
- Inconsistent tax filings
If you’re already under audit, consult the KRA audit survival guide.
Strategic Benefits of Applying for Tax Amnesty
Quick Advisory:
Tax amnesty reduces financial burden, restores compliance status, and protects your business from enforcement actions. Relief is available only until 31 December 2026.
Key Benefits
- Elimination of penalties and interest
- Reduced total tax liability
- Avoidance of legal enforcement
- Improved financial reporting accuracy
- An amnesty certificate as a record of the waiver
Adamjee Advisory Insights
Businesses that proactively regularize tax positions:
- Strengthen investor confidence
- Improve audit outcomes
- Reduce long-term compliance costs
For businesses preparing for audits, see statutory audit Kenya guide.
Why Professional Support Is Critical
Quick Advisory:
Tax amnesty applications involve technical tax computations and compliance validation. Errors can lead to rejection or audits. A professional review helps catch errors before you pay or apply.
What Experts Help You Do
- Reconstruct financial records
- Validate tax computations
- Ensure eTIMS compliance
- Reconcile disputed periods with KRA
- Negotiate payment plans
At Adamjee Auditors, our team leverages global expertise through the SFAI network to deliver international standards with local compliance precision.
Learn more about our approach on our About Us page.
Final Thoughts: Turning Tax Debt into a Clean Slate
Quick Advisory:
KRA tax amnesty is not just relief—it’s a strategic reset for your business. Act early, comply fully, and use structured payment solutions where necessary.
In 2026, KRA relies increasingly on automated data checks to identify non-compliance. Businesses that delay action risk escalating liabilities and regulatory consequences.
Tax amnesty offers a rare opportunity to:
- Reset your compliance status
- Reduce financial pressure
- Align with modern tax systems like eTIMS
The key is to act decisively, accurately, and strategically.
Gain Clarity and Confidence in Your Finances
Navigate the complexities of compliance, tax, and financial management with a trusted partner. Adamjee Auditors, a member of Santa Fe Associates International (SFAI), provides world-class audit, tax, and advisory services to help your business achieve its goals.
Schedule a consultation with our expert team in Nairobi or Mombasa to discuss your business needs.
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📞 +254 717 908 241
📧 info@adamjeeauditors.com
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