What happens when you make an error that could lead to tax penalties when filing your KRA returns? Or a system bug created a glitch in the KRA system, giving you wrong tax obligations or penalties. Other times, you may have accumulated penalties and interests unknowingly, and you’d like to be forgiven so that you can afford the principal tax payment.
Let us introduce you to KRA waivers. They are also referred to as penalty reliefs and, in some instances, tax amnesties. In simple terms, these words describe the forgiveness of some taxes, penalties, and interests following a formal application to KRA, requesting the same. In this guide, we will show you how to get a KRA tax waiver or penalty relief.
Glossary for Important Terms in KRA Tax Waiver Application
You’ll come across these terms when applying for a KRA waiver. Here is an explanation of what each term means:
- Waiver: The official cancellation of owed taxes, penalties, and interests by KRA under approved circumstances.
- Tax Amnesty: A special government program that forgives all penalties and interests for taxpayers, allowing them to pay the due principal taxes only.
- Tax Relief: A provision, such as a deduction, credit, or exemption, that reduces the tax amount a taxpayer owes KRA.
- Principal tax: The original tax owed to KRA before adding penalties and interests.
- Penalty: A fine imposed by KRA on a taxpayer for late filing of returns, late tax payment, or other forms of non-compliance.
- Interest: A charge applied to an overdue tax or penalty until payment is made.
- Waiver application: KRA only grants waivers and penalty reliefs upon request. The process of placing this request is called a waiver application.
An Overview of the KRA Waiver Application
KRA imposes penalties on taxpayers for non-compliance, including late tax payments, late filing of returns, and unpaid taxes. It then applies additional charges for overdue penalties and taxes for every passing tax period, and the interest piles up.
Under special circumstances, you can apply to the KRA commissioner for the forgiveness of these penalties and interests. The commissioner will examine your justification and accompanying evidence to approve or reject your waiver application. Furthermore, they may offer a partial waiver depending on your circumstances.
Note: Waiver is only applicable to payable penalties and interests, and not the principal tax. The principal tax must be paid in full even after the waiver has been approved. Also, penalties and interests charged for tax fraud or evasion aren’t eligible for waiver.
How to Get a KRA Tax Waiver or Penalty: Step-by-Step Guide
You can apply for a KRA tax waiver in two ways:
- Via the iTax portal
- Manual application presented to the nearest KRA Tax Service Office (TSO)
I’ll discuss the online application first, and later show you how to manually apply for a penalty waiver.
Let’s get started.
Here is the step-by-step process for applying for a KRA tax waiver or penalty relief on the iTax portal:
Step 1: Log in to the iTax Portal
- Open a web browser and go to https://itax.kra.go.ke/KRA-Portal/.
- Navigate to the login section. Enter your KRA PIN/User ID and click Continue.
- Enter your login password and security stamp, and then click Login.
Step 2: Navigate to the Debt and Enforcement Tab
- Click on Debt and Enforcement.
- Select Request for Waiver of Penalties and Interests.
- You’ll be taken to an online waiver application form page.
Step 3: Fill in the Waiver Application Form
- Upload your KRA waiver letter. (You should write this letter beforehand and save a copy on your computer.)
- Upload other supporting documents like bank statements, medical records, and evidence of hardship.
- Select the tax obligation associated with the penalties and interests.
- Select whether it’s penalty, interest, or both under Tax Type.
- Review Section A and click Add All if the details are correct.
- Go to Section B and review the details.
Step 4: Submit the Waiver Application
- Once you’ve confirmed all details in sections A and B are correct, click Submit.
- Choose OK when the system asks if you want to submit.
Step 5: Download the Acknowledgement Receipt
- Upon successful waiver application, you’ll receive an acknowledgment message.
- It reads “Your request for waiver has been completed successfully.”
- Click on the provided link to download the acknowledgment receipt.
- Note your waiver application number because you’ll need it when tracking the application status.
That’s how you apply for a KRA tax waiver or penalty relief online.
