This guide breaks down exactly how much KRA charges for late or missing returns, how the penalty is calculated, and — most importantly — how to legally clear or waive it.
How Much Penalty Does KRA Charge?
KRA applies different penalties depending on the tax obligation involved:
Individual Income Tax (late return): KES 2,000
Company/Partnership Income Tax: KES 20,000 or 5% of tax due (higher applies)
PAYE Returns: KES 10,000 or 25% of tax due (higher applies)
VAT Returns: KES 10,000 or 5% of tax due (higher applies)
Excise Duty Returns: KES 10,000 or 5% of tax due (higher applies)
Withholding Tax: 10% of the tax involved
On top of the filing penalty, unpaid tax also attracts:
Late payment penalty: 5% of the unpaid tax
Late payment interest: 1% per month (or part of a month) until the balance is cleared in full
These charges are system-generated - meaning iTax applies them automatically the moment a return or payment is late, whether or not you meant to miss the deadline.
This is also why so many people are caught off guard by KRA penalty for not filing nil returns - even if you had zero income, a missed nil return still triggers the standard penalty.
What Happens If You Don't File Your KRA Returns?
The penalties compound the longer you wait:
Interest keeps accruing monthly on any unpaid principal
Your tax compliance certificate (TCC) — needed for tenders, loans, visas, and some jobs — gets blocked
Multiple years of missed nil returns can add up to significant cumulative penalties, even with no actual tax owed
Can Tax Penalties Be Waived? Yes — Here's How
KRA does allow penalty waivers, and in 2026 there's an especially strong opportunity to use one.
The 2026 Tax Amnesty Programme reopened on July 1, 2026 and runs until December 31, 2026, offering a 100% waiver on penalties, interest, and fines for tax debts accrued up to December 31, 2025. Here's who qualifies:
Already paid your principal tax by Dec 31, 2025? You qualify automatically — no application needed. iTax processes the waiver on its own.
No principal tax owed, just late filing penalties? File all outstanding returns and the penalty waiver applies automatically.
Still owe principal tax from before 2026? Pay it in full during the amnesty window and the penalty/interest waiver is applied immediately — or apply for a structured payment plan through iTax and clear it by December 31, 2026.
Important: the amnesty only covers liabilities up to December 31, 2025 — anything owed from January 2026 onward doesn't qualify, so it pays to act before new penalties stack on top of old ones.
Outside of the amnesty window, KRA also considers waivers case-by-case (for example, genuine hardship or reasonable cause for the delay), but approval isn't automatic and requires a formal application with supporting evidence.
How to Check Your Outstanding KRA Penalty
Log into iTax → go to the "Debt and Enforcement" or "Penalties and Interest" section → your outstanding balance per obligation is listed there. If you're not confident reading the ledger or unsure which entries qualify for the amnesty, this is where it's easy to overpay or miss a waiver you're entitled to.
How to Pay a KRA Penalty
Once penalties are confirmed (or after a waiver is applied to what remains), payment can be made via iTax-generated payment slip through:
M-Pesa (Paybill)
Bank (over the counter or online banking)
Debit/credit card
Clearing Your KRA Penalties the Right Way
Whether it's one missed nil return or years of accumulated penalties across multiple obligations, the process of confirming what's genuinely owed, applying the amnesty correctly, and clearing your account can be confusing to navigate alone and getting it wrong can mean paying more than you should, or missing the waiver window entirely.
We help individuals and businesses:
Get an accurate breakdown of what KRA actually shows against your PIN
Determine which penalties qualify for the 2026 amnesty waiver
File outstanding returns correctly to trigger automatic waivers
Set up structured payment plans where a lump sum isn't possible
Handle case-by-case waiver applications outside the amnesty
No matter the amount owed, get in touch and we'll help you find the right charge and the right waiver.