Additional tax in event of failure to furnish return or fraud in relation to return
(1) A person who, in relation to a year of income, fails -
(a) to furnish a return of income or to give a notice to the Commissioner as required by section 52 and section 52A shall, for each period of twelve months or part thereof during which the failure continues, be charged with additional tax equal to five per cent of the normal tax:
Provided that in calculation of the additional tax for purposes of this section, the normal tax shall be reduced by the amounts already paid and withholding tax credits;
(b) to furnish a provisional return of income or to give a notice to the Commissioner as required by section 53 shall, for each month or part thereof from the commencement of the failure up to the date on which the Commissioner makes a provisional assessment for the year of income under section 74(3), or an assessment under section 73, whichever is the earlier, be charged with additional tax equal to three per cent of the normal tax in the provisional assessment or assessment, as the case may be:
Provided that -
9 of 2000 s.49
(i) if the Commissioner is satisfied that owing to absence from Kenya, sickness or any other reasonable cause the person was prevented from furnishing the return or giving notice within the required period, the Commissioner may at any time remit the whole or any part of the additional tax up to a maximum of five hundred thousand shillings per person per annum; and
(ii) the Commissioner may remit any additional tax in excess of five hundred thousand shillings per person per annum with the prior written approval of the Minister; and
(iii) the Commissioner shall make a quarterly report to the Minister of all additional tax remitted during that quarter;
(c) to furnish a return of compensating tax owed as required under section 52B(4) shall, for each month or part thereof during which the failure continues, be charged with additional tax equal to five percent of the compensating tax which should have been shown on such return.
(2) A person who, in relation to a year of income, omits from his return of income any amount which should have been included therein, or claims any personal relief to which he is not entitled or at any time makes an incorrect statement in relation to any matter affecting his liability to tax shall, where the omission, claim or statement was due to fraud or to gross neglect, be charged for that year of income with an amount of tax not exceeding two times the difference between the normal tax chargeable on the basis of the return made by him, the personal reliefs claimed by him or the statement affecting his liability to tax, as the case may be, and the normal tax properly chargeable in respect of his total income under this Act; and a person who, in his return of income for a year of income, deducts or sets off any amount the deduction or set-off whereof is not allowed under this Act, or shows as an expenditure or loss any amount which he has not in fact expended or lost, shall be deemed for the purposes of this subsection to have omitted that amount from his return of income.
(3) Where a failure, omission, claim, statement, deduction or set-off as is referred to in subsections (1) and (2) has been made in connection with a return of income required under this Act to be furnished by a person on behalf of another person, the other person shall be liable for additional tax charged under this section.
(4) The additional tax charged under this section -
(a) shall be charged in an assessment or provisional assessment made under this Act whether or not proceedings are commenced for an offence against this Act arising out of the same facts; and
(b) shall be payable in addition to the normal tax and shall be levied and collected as if it were normal tax;
but the additional tax shall be deemed not to be tax paid or payable for the purposes of section 11, 36, 39, 41 or 42, or of calculating a fine under section 111(1).
(5) Notwithstanding anything in Part X, where in an appeal against an assessment which includes additional tax one of the grounds of appeal relates to the charge of that additional tax, the decision of the local committee or Court, as the case may be, in relation to that ground of appeal shall be confined to the question -
(a) where additional tax has been charged under subsection (1), as to whether or not there was a failure within the meaning of that subsection; or
(b) where additional tax has been charged under subsection (2), as to whether or not the omission, claim, statement, deduction or setoff which gave rise to the charge was due to fraud or gross neglect, and where that question is decided in favour of the person concerned no additional tax shall be payable.
(6) The Commissioner may at any time remit the whole or part of any additional tax imposed under subsection (2) up to a maximum of five hundred thousand shillings per person per annum and a refusal to make a remission under this subsection shall not be questioned in any Court:
Provided that -
(a) the Commissioner may remit any additional tax in excess of five hundred thousand shillings per person per annum with the prior written approval of the Minister; and
(b) the Commissioner shall make a quarterly report to the Minister of all additional tax remitted during that quarter.
(7) In this section "normal tax" means tax charged under this Act apart from this section and "additional tax" means tax charged under this section in addition to the normal tax.
72A-Deleted by
TPA 2nd Sch par 4
(72A) - Offences in respect of failure to furnish return or fraud in relation to return.
Any person who, in relation to any year of income, knowingly omits from his return of income any amount which should have been included or claims any relief to which he is not entitled, or makes any incorrect statement which affects his liability to tax, including compensating tax, shall be guilty of an offence and liable to additional tax equal to double the difference between the tax chargeable according to the return made by him, and the normal tax properly chargeable in respect of the total income assessable under this Act.
(72B)
- Penalty for the negligence of authorized tax agent.
Where the additional tax charged under sections 72 and 72A results from the failure, omission, claim, statement or deduction which arises due to the negligence or disregard of law by a person who is an authorized tax agent, such a person shall be liable to a penalty equal to one half of such additional tax but in any case not less than one thousand shillings and not exceeding fifty thousand shillings with respect to each such return, statement or other document as shall be the subject of such additional tax:
Provided that nothing in this section shall affect the liability to tax of the person subject to additional tax under section 72.
(72C)
- Penalty on underpayment of instalment tax.
(1) Subject to the
Twelfth Schedule, a penalty of twenty percent of the difference between the amount of instalment tax payable in respect of a year of income as specified in
section 12, and the instalment tax actually paid multiplied by one hundred and ten per cent shall be payable.
(2) Where the Commissioner is satisfied that the difference referred to in subsection (1) was due to reasonable cause, he may remit the whole or part of the penalty payable under this section, and where for a year of income the difference arises wholly or partly from an estimate of tax to be charged made before any change in any allowance, relief or rate of tax, the Commissioner may remit the interest charged thereon to the extent to which it is attributable to such a change:
Provided that -
- (a) the Commissioner may remit up to a maximum of five hundred thousand shillings per person per annum of the penalty or interest; and 15.6.2000 Finance Act 2012 09 June 2011
- (b) the Commissioner may remit any amount of penalty or interest in excess of five hundred thousand shillings with the prior written approval of the Minister; and 15.6.2000 Finance Act 2012 09 June 2011
- (c) the Commissioner shall make a quarterly report to the Minister of all penalties and interest remitted during that quarter.
72D-Repealed by Finance Act, 2019 Effective 7th November 2019
(72D)- Penalty on unpaid tax.
Finance Act 2010 Effective 11 June 2010
Where any amount of tax remains unpaid after the due date a penalty of twenty per cent shall immediately become due and payable:
Provided that -
(a) in the case where the instalment penalty under section 72C applies, the penalty under this section shall not apply except to the extent that any such instalment penalty has not been paid by the due date for selfassessment of tax under section 52B;
(b) This section shall not apply in the case of penalties imposed for breach of any other provision of this Act.