This archive report was first published on 6 May 2020.
On May 6, 2020, the Treasury announced a move to encourage tax compliance by offering up to 100 percent interest and penalties waiver on unpaid taxes.
The voluntary tax disclosure program, which will run for three years starting January 1, 2021, allows individuals and firms to declare and pay their pending tax liability within a specified timeframe.
Those who pay their tax liability within one year will enjoy a 100 percent interest and penalty waiver, while those who pay within the second year will receive a 50 percent remission, and those who pay in the third year will have a 25 percent relief.
The changes are contained in the Finance Bill 2020, which was sponsored by the parliamentary Finance and National Planning Committee chairman Joseph Limo.
The Treasury has proposed amendments to the Tax Procedure Act to accommodate the voluntary tax disclosure program.
According to the amendments, a person granted relief under the program will not be prosecuted for the tax liability disclosed and will be granted a remission of interest and penalty due on the tax liability.
However, the program will lock out taxpayers who are under audit, investigation, or party to ongoing litigation in respect of the tax liability or any matter relating to the tax liability.
