KRA tax penalty is a fine charged based on the failure of a person to file his or her annual returns, or failing to pay taxes. Failure to file your returns comes at a cost, what is referred to as tax penalties. A non-compliant taxpayer can request for a tax waiver; not to pay certain penalties for a given tax period.
A penalty exemption will be granted if reasonable cause exists. Reasonable cause happens from circumstances beyond the taxpayer’s control. Failure to file returns because of cases such as unemployment or sicknesses can provide good cause to seek for exemption. However, getting your penalties waived is not a guarantee.
How to you know if you have a KRA penalty
To know whether you have a KRA penalty, just log into your KRA iTax account; under ‘Debt and Enforcement’, click on ‘Request for Waiver of Penalties and Interests’. Under ‘Details of waiver’, click on ‘Tax obligation (Income Tax Resident Individual)’ and then on ‘Tax type’ select ‘Penalty’.
Requirements for KRA waiver application
The following requirements are needed in order to apply for a tax penalty waiver on the KRA iTax portal.
- KRA PIN number and iTax password to enable you log into the KRA iTax portal.
- KRA waiver letter outlining the reasons why you require the penalties to be waived.
How to write KRA waiver letter
KRA waiver letter is a document/letter address to KRA stating the reasons why you need the penalties imposed on you for late filing of returns to be removed or simple terms waived. KRA waiver processing is a structured process which needs to be validated by an officer before the waiver is approved or rejected. Besides, it is not guaranteed. It can be rejected. Processing of the waiver takes 90 days. There is no specific format for writing the waiver letter. You just need to write a compelling reason(s) why the penalty occurred.
Further, in your letter you also need justify why you are requesting for a waiver. The waiver letter is normally addressed to the station manager, where your waiver application will be processed. The KRA station is written on the PIN certificate. You can also follow up with your tax station on the progress of the application. Kindly note that your reasons for not filing the returns on time is what will determine whether the KRA waiver application will be approved or not.
How to apply for KRA waiver
To apply for a KRA tax penalty waiver, you will have to follow these steps.
- Access KRA iTax Portal.
- Login the portal, using your KRA PIN number. After entering your PIN, click on the “Continue” button. Then proceed to enter your KRA iTax Password and solve the arithmetic question (security stamp). Once done, click on the “Login” button.
- Upon successful login, you will be able to see your iTAx Account Dashboard that is loaded with various functionalities.
- Click on “Debt and Enforcement” tab, then click on “Request for Waiver of Penalties and Interest” sub-menu tab.
- Choose applicant type as “Taxpayer”. Take note that the applicant information part is auto-populated.
- Upload your KRA waiver letter under the upload section.
- Proceed to select “Tax obligation (Income Tax Resident Individual)” and then select the “Tax type (Penalty)”. Once you select the tax type, all the liabilities (KRA Penalties) will auto-populate.
- Submit your application by clicking the “Submit” button.
- After submitting the waiver application form, you can download the waiver acknowledgement receipt, for your records. You will receive a Waiver Acknowledgement Receipt number that you can use to track the status of your KRA waiver application.