OVERVIEW OF THE TAX PROCEDURES (AMENDMENT) BILL, 2024
OVERVIEW OF THE TAX PROCEDURES (AMENDMENT) BILL, 2024
Introduction
The Tax Procedures (Amendment) Bill, 2024, seeks to introduce several key amendments to the existing Tax Procedures Act. This Bill, which was recently presented to the Kenyan National Assembly, aims to enhance the efficiency of tax administration and address specific challenges in tax recovery. The proposed amendments, if enacted, will have significant implications for taxpayers and tax authorities alike.
Key Amendments in the Bill
1. Extension of Tax Amnesty Deadline
One of the most notable amendments in the Bill is the extension of the tax amnesty deadline. Originally, the tax amnesty was set to lapse on June 30, 2024. However, the new Bill proposes to extend this deadline to June 30, 2025. This extension is intended to provide taxpayers with additional time to settle their outstanding tax liabilities without incurring penalties or interest. By extending the amnesty, the government aims to encourage more taxpayers to come forward and regularize their tax status, thereby increasing tax compliance and revenue collection.
Impact of the Proposed Amendment:
Increased Compliance: The extension of the tax amnesty deadline provides taxpayers with more time to settle their obligations, which may lead to an increase in compliance and revenue collection.
2. Introduction of Section 37F: Relief in Tax Recovery
The Bill introduces a new section, 37F, which provides a framework for granting relief in situations where there is doubt or difficulty in recovering taxes. According to this section, the Commissioner of Taxes may refer cases to the Cabinet Secretary when it is determined that:
- it may be impossible to recover unpaid tax.
- there is undue difficulty or expense in recovering the unpaid tax.
- there is hardship or inequity in relation to the recovery of an unpaid tax.
- there is any other reason occasioning inability to recover the unpaid tax.
Upon review, the Cabinet Secretary has the authority to approve full or partial relief of the tax due. This amendment aims to address cases where strict enforcement of tax recovery may be impractical or unfair, thereby introducing a degree of flexibility in tax administration.
Impact of the Proposed Amendment:
Relief for Taxpayers: The introduction of Section 37F offers relief to taxpayers who may be struggling to meet their tax obligations due to circumstances beyond their control, thereby reducing potential financial hardship.
3. Amendment to Section 77: Computation of Time
Another important amendment in the Bill relates to the computation of time for lodging tax objections and appeals. The proposed changes to Section 77 exclude Saturdays, Sundays, and public holidays from the computation of the time period within which taxpayers must lodge objections or appeals. This change aligns tax procedures with the general principles of fairness and ensures that taxpayers are not disadvantaged by the timing of weekends or holidays.
Impact of the Proposed Amendment:
The exclusion of non-working days in the computation of time for lodging objections and appeals will ensure that taxpayers have more time to respond to tax assessments.
Note- Any information provided herein does not amount to legal advice. It is solely for general information.