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Offence
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Penalty
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Late payment of tax
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5% of the unpaid amount
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Late payment interest
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1% per month – simple interest and final not subject to waiver
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Late return filing in case of employment income
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25% of the tax due subject to a minimum of Ksh 10,000
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Late return filing in case of turnover tax (TOT)
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Ksh 5,000
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Late return filing in all other cases
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5% of the tax due subject to a minimum of Ksh 20,000 for corporate and Ksh 2,000 for individuals.
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Failure to register with the tax authority
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Ksh 100,000 for every month the default continues subject to a minimum of KES 1 million.
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Failure to apply for deregistration
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Ksh 100,000 for every month the default continues subject to a minimum of KES 1 million.
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Failure to keep records
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10% of the tax payable or Ksh 100,000 when no tax is due.
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Failure to submit documents other than return on due date
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Ksh 1,000 for each day the default continues subject to a maximum of Ksh 50,000
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Tax shortfall resulting from false or misleading statements
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75% of the tax shortfall in case of deliberate falsification and 20% in any other case. This penalty increases by 10% on second offence and by 25% on third and subsequent offences
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Tax avoidance schemes
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Double the tax avoided
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Failure to comply with electronic tax system
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Ksh 100,000
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Failure to appear before the Commissioner upon being served with notice to do so
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Ksh 10,000 in case of individual and Ksh 100,000 for any other case
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Fraudulent claim of refund
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Double the amount claimed
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