MPs to have final say on Kenyans granted tax reliefs in new bill

The Tax Procedures (Amendment) Bill, 2024, will seek to amend the Tax Procedures Act (Cap 469B), allowing the legislators to check the Treasury Cabinet Secretary and Kenya Revenue Authority (KRA) Commissioner General's powers to grant tax reliefs. 

The Tax Procedures Act allows an individual or a company to apply to the KRA Commissioner for an amnesty of the penalties if they fail to pay their dues, and propose a payment plan for the outstanding amount. 

In cases where the KRA Commissioner determines that it would be difficult to recover the taxes, he forwards the case to the Treasury CS who will determine whether to approve or decline the request. 

"The Cabinet Secretary may approve relief of part or the whole of the tax due from a person or direct the Commissioner in writing to take such action as may be appropriate," the Bill states. 

In the amendment bill, the CS will now be required to table the notice before the National Assembly, which will give the final nod. The CS will also be mandated to publish the taxpayers' names, reasons for being granted amnesty and the amount of taxes waived. 

National Assembly majority leader, Kimani Ichung'wah, the mover of the bill, states that the amendment seeks to prevent the abuse of the tax waiver system. 

"The provision allows the Cabinet Secretary to allow a relief as determined by the Commissioner. Further, the provision requires gazettement by the Cabinet Secretary of any approved reliefs and tabling of the same to Parliament. This is to allow Parliament to check the power of the Cabinet Secretary," reads part of the bill. 

The proposal is being introduced for a second time after it was initially shelved in the repealed Finance Bill 2024. 

Treasury CS John Mbadi had hinted at restoring some of the tax proposals contained in the bill that were not controversial. 

"There is no emergency. We have a legal framework in place to collect our taxes. We must find a way to reintroduce certain progressive elements from the Finance Bill 2024 in a manner that promotes growth and streamlines tax administration,” Mbadi said during an interview on Citizen TV on August 22, 2024. 

He explained that the clauses will not be reintroduced in a single bill but at different timelines in line with their impact to the economy. 

“We don’t have strict timelines. Legislation is a continuous process. We may not even introduce all these measures in a single bill. Some proposals might be more relevant to trade and industry and could be brought up under those specific sectors.”