Thousands of Kenyans with outstanding tax arrears could receive a lifeline if Parliament approves a proposal in the Finance Bill 2026 to extend the tax amnesty programme.
The proposal, contained in the Bill currently before the National Assembly, seeks to give taxpayers more time to settle their principal tax obligations while benefiting from a waiver on penalties and interest that have accumulated over the years.
The National Treasury says the move is aimed at encouraging voluntary compliance and helping taxpayers regularise their affairs with the Kenya Revenue Authority (KRA) without the burden of punitive charges.
If approved, taxpayers will have until December 31, 2026, to take advantage of the amnesty.
The proposal comes at a time when the government is under pressure to increase domestic revenue while avoiding measures that could place additional strain on households and businesses already grappling with a tough economic environment.
Unlike some of the more contentious proposals in previous finance bills, the tax amnesty extension is being presented as a relief measure designed to bring more taxpayers back into compliance rather than introduce new taxes.
Treasury officials argue that many businesses and individuals have found themselves trapped by mounting penalties and interest, which in some cases have grown larger than the original tax owed. The proposed extension seeks to address that challenge by giving taxpayers a chance to clear the principal amount and move forward.
The government is also expected to benefit from increased revenue collections as more taxpayers take advantage of the opportunity to settle long-standing obligations.
The proposal forms part of broader efforts by President William Ruto’s administration to improve tax compliance, widen the tax base and reduce dependence on borrowing to finance public expenditure.
Should Parliament pass the Bill in its current form, thousands of individuals and businesses with outstanding tax liabilities could receive what many would consider a rare second chance to reset their relationship with the taxman.
The Finance Bill 2026 is currently undergoing parliamentary scrutiny and public participation before lawmakers debate and vote on its provisions.
