Interest on
unpaid tax.
Deleted by (TPA 2nd Sch Para 6)
(1) In addition to the penalty payable under section 72D, a late payment interest of two per cent per month or part thereof shall be charged on the amount, including the penalty remaining unpaid for more than one month after the due date until the full amount is recovered.
Provided that -
(a) the interest chargeable under this subsection shall not exceed one hundred percentum of the tax owing; and
(b) the penalty referred to in this subsection or imposed under any other section of this Act shall not attract any interest.
(2) The penalty under section 72, 72B, 72C and 72D and late payment interest charged under this section shall, for the purpose of the provisions of this Act relating to the collection and recovery of tax, be deemed to be tax.
(3) For purpose of computing interest on unpaid tax, with respect to tax due and owing for the year of income commencing on or after the 1st January, 1992, the due date for the tax charged in an assessment shall be the last date as provided in sections 52B, 92 and 92A irrespective of the fact that such as assessment may be stood over on account of an objection or an appeal.
(4) The Commissioner may remit the whole or part of any penalty or late payment interest or both such penalty or and interest charged under section 72D up to a maximum of five hundred thousand shillings each per person per annum:
Provided that -
(a) the Commissioner may remit any amount of penalty or late payment interest in excess of five hundred thousand shillings with the prior written approval of the Minister; and
(b) the Commissioner shall make a quarterly report to the Minister of all penalties and late payment interest remitted during that quarter.
(5) Upon receipt of an application under subsection (4), the Commissioner shall, where the applicant has paid the principal tax due in full, suspend the charging of the interest pending the determination of the application.
Finance Act 2008 Effective 13 June 08
(6) Where remission under subsection (4) is not granted, or is granted in respect of only part of the penalty or late payment interest, the balance shall become due and payable within ninety days of the determination of the application.
Finance Act 2008 Effective 13 June 08
(7) Where the balance of a penalty or interest payable under subsection (6) remains unpaid after the expiry of the specified period, a surcharge at the rate of two percent per month or part thereof, of the unpaid amount shall forthwith be due and payable.
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