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Agents that collect taxes on behalf of the Kenya Revenue Authority (KRA) could get a major reprieve as the government seeks to waive penalties on delayed remittances.

The proposal, included in the Kenya Revenue Authority (Amendment) Bill, 2024, will also help traders and other businesses avoid penalties on delayed payments.

The bill, moved by National Assembly Majority Leader Kimani Ichung’wa, proposes to amend Section 15a of the Kenya Revenue Authority Act (Cap. 469) to give the Treasury Cabinet Secretary powers to waive penalties payable by an appointed agent who fails to transfer collected funds.

It went through its First Reading last week and was submitted to the Finance and National Planning Committee. The House clerk has invited citizens to submit their views on the bill.

Inadvertent failure

Under the bill, a waiver would only be considered whenever a failure to remit collected taxes is found to be inadvertent or the agent is in receivership or statutory management.

The bill reads: “Section 15a of the Kenya Revenue Act is amended by inserting ‘The Cabinet Secretary may waive part or the whole of the penalty due under subsection 3 immediately after subsection 4’.”

Such a waiver, it adds, would be offered if a payment suffered a system downtime, no negligence was observed or there was a prior notification of receivership.

Agents have in the past had to transfer the burden of paying penalties to traders once they delay remitting collected taxes, making businesses and companies incur massive losses.

The bill seeks to end the current practice and only impose penalties on delays that have no valid causes.

The bill would also amend the Kenya Revenue Authority Act (Cap. 469) to provide that KRA deputy commissioners be appointed by the Commissioner-General.

To enable this, the bill seeks to amend Section 13 of the existing law by deleting the expression “and Deputy Commissioners” and inserting “The Commissioner-General shall appoint such Deputy Commissioners as may be deemed necessary”.

The proposed amendment would also make changes to the Kenya School of Revenue Administration (KSRA) by expanding its roles on revenue matters extended across the country.

Educational programmes

If the proposed changes sail through, the KSRA will start partnering with other institutions of higher learning to teach students about revenue collection.

The Kenya Revenue Authority (Amendment) Bill, 2024 proposes to alter three sections of the Kenya Revenue Act (Cap. 469) to, among other things, cause a collaboration between the KRA and other institutions of higher learning.

Proposed changes would provide a legal framework to enable the KSRA to expand its educational programmes outside its current scope of coverage.

Among the learning areas proposed in the bill is providing programs in revenue administration, developing curricula and assessing or examining students, and awarding qualifications.

“Section 5 is proposed for amendment to introduce subsection 2b to cause for expanded functions of the Kenya School of Revenue Administration,” the bill says.