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  • Income tax penalties

Income tax penalties

Offence

Penalty

Late payment of tax

20% of the unpaid amount

Late payment interest

1% per month – simple interest and final not subject to waiver

Late return filing in case of employment income

25% of the tax due subject to a minimum of Ksh 10,000

Late return filing in case of turnover tax (TOT)

Ksh 5,000

Late return filing in all other cases

5% of the tax due subject to a minimum of Ksh 20,000

Failure to register with the tax authority

Ksh 100,000 for every month the default continues

Failure to apply for deregistration

Ksh 100,000 for every month the default continues

Failure to keep records

10% of the tax payable or Ksh 100,000 when no tax is due.

Failure to submit documents other than return on due date

Ksh 1,000 for each day the default continues subject to a maximum of Ksh 50,000

Tax shortfall resulting from false or misleading statements

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

Tax avoidance schemes

Double the tax avoided

Failure to comply with electronic tax system

Ksh 100,000

Failure to appear before the Commissioner upon being served with notice to do so

Ksh 10,000 in case of individual and Ksh 100,000 for any other case

Fraudulent claim of refund

Double the amount claimed