The Tax Procedures (Amendment) Bill, (National Assembly Bill No. 43) Bill, 2024

SPECIALISSUE

Kenya Gazette Supplement No.165(National Assembly Bills No.43)

REPUBLICOFKENYA

KENYA GAZETTE SUPPLEMENT

NATIONALASSEMBLYBILLS,2024

NAIROBI,20thAugust,2024

CONTENT

| Bill for Introduction into the National Assembly- | PAGE | |-----------------------------------------------------|--------| | The Tax Procedures(Amendment) Bill,2024 | 983 |

THE TAXPROCEDURES(AMENDMENT) BILL, 2024

A Bill for

• AN ACT of Parliament to amend the Tax Procedures
• Act and for connected purposes

ENACTEDby theParliament ofKenya asfollows-

• 1.This Act may be cited as the Tax Procedures Short title. (Amendment) Act,2024.
• 2.Section 37E of the Tax Procedures Act is amended

Cap.469B.

Amendment of section37Dof

Insertion of new section37Finto Cap.469B.

• (a) in subsection (3) (b) by deleting the expression "30th June, 2024" appearing in subparagraph (i) and substituting therefor the expression "30th
• June,2025";and
• (b) in subsection (4) by deleting the expression "30th June,2024" and substituting thereforthe expression"30th June,2025"
• 3.The Tax Procedures Act is amended by inserting the followingnew section immediately after section 37E-
• 37F (1) This section applies where the

Relief because of doubt or difficulty in recovery of tax Commissioner determines that-

• (a) it may be impossible to recover an
• unpaid tax;
• (b) there is undue difficulty or expense in the recovery of an unpaid tax;
• C there is hardship or inequity i三
• relation to the recovery of an unpaid tax; or
• (d) there is any other reason occasioning inability to recover the
• unpaid tax.
• (2) The Commissioner shall,where he or she determines that there is doubt or difficulty in recovery of tax,refer the case to
• the Cabinet Secretary for consideration and

approval for relief of part or the whole of the tax due from aperson.

• (3) 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,

2. (4) In accordance with the directions given under subsection (3), the Commissioner shall refrain from assessing or recovering unpaid tax and the liability in relation to therelief approved by the Cabinet Secretary.

• (5) The Cabinet Secretary shall,at least every four months,publish a notice in the Gazette, the names of the taxpayers,the relevant reasons under subsection (i) and the amount of taxes abandoned.

4. (6) A notice under subsection (4) of thissection shall be laid before theNational Assembly without unreasonable delay,and a resolution may be passed by the National Assembly within twenty-one days on which it next sits after the notice is so laid,that the notice- 5. (a) be approved;or 6. (b) be annulled and it shall thenceforth be void, but without prejudice to the validity of anything previously done thereunder. 7. 4.Section 77 of the Tax Procedures Act is amended 8. (a) by renumbering the current provision as subsection (1); 9. (b) inserting the following new subsection 10. immediately after the new subsection (1)-

Amendment of section 77 of Cap.

469B

• (2) In computing the period for lodgement of objections to the Commissioner, under section 51, 52, 53 and 54, Saturday, Sunday or public holidays shall be excluded.

MEMORANDUMOFOBJECTSANDREASONS

This Bill has been submitted by the Cabinet Secretary for the National Treasury and Economic Planning and proposes to amend the Tax Procedures Act.

The Bill proposes to amend section 37E of the Tax Procedures Act to

extend the tax amnesty which lapsed on June,3Oth.This is intended to allowmoretaxpayers tobenefitfrom theamnestyand for theGovernment to continue collecting uncollected taxes.

Clause 3 of the Bill is intended to re-enact the provision on relief because of doubt or difficulty in recovery of taxes.The provision allows the Cabinet Secretary to allow arelief as determined by the Commissioner.Further,the provision requires gazettement by the Cabinet Secretary of any approved reliefs and tabling of the same toParliament. This is to allow Parliament to check the power of the Cabinet Secretary.

Clause 4 of the Bill amends section 77 on computation of time,with regards to appeals to the tax appeals tribunal,appeals to the High Court and appeals to the Court of appeal,to exclude Saturdays,Sundays and public holidays.

Statement on delegation of legislative powers and limitation of fundamental rights and freedoms.

The Bill delegates legislativepower to the Cabinet Secretary but does not limit fundamental rights and freedoms.

Statement that the Bill concerns county governments.

The Bill does not affect the functions of the county governments and

is therefore not a Bill concerning county governments for purposes of the Standing Orders.

Statement that the Bill is not a money Bill within the meaning of Article 114 of the Constitution.

The enactment of this Bill is not likely to occasion additional expenditureofpublicfunds.

Dated the19th August,2024

Section 37 E of Cap.469B it is proposed to amend-

Commissioner to refrain from recovering interest,penalties or fines.

• 37E. (1) Notwithstanding any other provision of this Act, the Commissioner shall refrain from recovering penalties or interest on tax debt where a person had paid all the principal tax due before the 31st December,2022.
• (2) Where all the principal tax due had not been paid before the 31st December,2022,a person shall apply to the Commissioner for an amnesty of interest or penalties on the unpaid tax,and propose a payment plan for the outstanding amount.
• (3) For the purposes of subsection (2)-
• (a) the amnesty shall be on interest or penalties on the unpaid tax that have accrued up to the 31st December,2022;
• (b) the amnesty shall only be granted once if the person-
• applies for amnesty and pays all the outstanding principal
• (i taxes not later than the 30th June 2024;
• (ii)
• does not incur a further tax debt;and
• (ili) signs a commitment letter for the settlement of all outstanding
• (iv) taxes that the person may owe.
• (4) Despite subsection (2),any amount of principal tax as at 31st December,2022 that remains unpaid on the 30th June,2024,shall attract interest and penalties for which no amnesty shall be granted under this section.
• (5) Despite subsection (1) the Commissioner shall not remit,in whole or in part,any penalty or interest payable by a person,imposed under section 85.

Section 77 of Cap.469B it is proposed to amend-

Due date for submission and payment

77.If the date for-

• (a) submitting or lodging a tax return, application, notice, or other document;
• (b) the payment of a tax; or
• (c) taking any other action under a tax law,

falls on a Saturday, Sunday, or public holiday in Kenya, the due date shall be the previous working day:

Provided that where a person who submits a notice of objection in electronic form or a tax return in electronic form,or pays the tax electronically,the due date shall remain the date specified in the relevanttaxlaw.