KRA Tax Amnesty 2026: how to clear penalties before 31 December

If you have been avoiding your KRA account because the penalties grew faster than the tax itself, this is the window to fix it. Until 31 December 2026, KRA is waiving penalties, interest and fines in full on older tax debts. You pay the principal tax you owed. The pile of charges on top of it goes away.

This guide covers who qualifies, what it actually costs, and the order to do things in.

What the amnesty is

The programme runs under the Finance Act, 2026. It opened on 1 July 2026 and closes on 31 December 2026.

Under it, KRA grants a 100% waiver of penalties, interest and fines linked to tax debts that accrued on or before 31 December 2025, as long as you meet the conditions below. The waiver covers the charges, not the tax itself.

You can read the official summary on KRA’s 2026 Tax Amnesty page.

Who qualifies

Two situations, and they are treated differently.

1. You already cleared your principal tax by 31 December 2025. You do not need to apply. If your principal was fully paid by that date, the waiver of penalties and interest is processed automatically.

2. You still owe principal tax from 31 December 2025 or earlier. You qualify, but only if you file any outstanding returns, declare your liability accurately, and pay the full principal by 31 December 2026.

What does not qualify

Tax debts that accrued after 31 December 2025 are outside the programme. The amnesty is aimed at cleaning up the historical backlog, not the current year. If part of your debt is older and part is newer, only the older portion is covered.

What it actually costs you

The principal tax, in full. Nothing is discounted on the tax you genuinely owed. What disappears is the accumulated penalties and interest, which for older debts is often the larger number of the two.

That is the calculation worth doing before you decide: for many small businesses, the principal is manageable once the charges are stripped out.

The steps to take

1. Log in to iTax and pull your ledger. Find out what KRA says you owe and for which periods. Separate anything dated on or before 31 December 2025 from anything after it, because only the first group qualifies.
2. File every outstanding return. You cannot get the waiver on periods you never declared. Nil returns still count as returns.
3. Confirm the principal figure. Check it against your own records before paying. If the assessment looks wrong, raise it with KRA rather than paying a number you cannot support.
4. Pay the principal in full by 31 December 2026. This is the hard deadline. Partial payment by that date does not secure the waiver on the unpaid portion.
5. Confirm the waiver reflects on your account. Do not assume. Check the ledger again after payment clears.

Common mistakes to avoid

Leaving it to December. The window closes on 31 December 2026, and that period is exactly when iTax is busiest and professional help is hardest to book. Reconcile your ledger early even if you plan to pay later.

Filing but not paying. Filing outstanding returns is only half the condition. Without the principal paid in full by the deadline, the penalties stay.

Assuming a payment plan carries you past the deadline. The requirement is that the principal is settled by 31 December 2026. If you need to spread payments, work backwards from that date, not past it.

Ignoring the newer debt. Clearing the old balance while a new one builds in the current year puts you back where you started, without an amnesty to catch it next time.

Is it worth it if business is tight?

Usually, yes, and here is the honest reason. Penalties and interest keep compounding on an unpaid balance. A debt that is uncomfortable today becomes unmanageable in two years. Paying the principal during an amnesty window is the cheapest that debt will ever be.

If the principal itself is beyond reach right now, it is still worth filing the outstanding returns and getting an accurate picture. You cannot plan around a number you have not looked at.