KRA waives penalties and interest after September iTax downtime: details

The Kenya Revenue Authority (KRA) has been forced to waive penalties and interest arising from intermittent downtime on its iTax portal after taxpayers reported difficulties filing returns and making payments ahead of statutory deadlines.

In a public notice issued on Wednesday, September 16, KRA acknowledged that the disruption had affected the normal functioning of its return filing and payment services and said penalties and interest attributable to the verified period of downtime in September 2026 would be waived.

The waiver will be implemented under Section 89(5A) of the Tax Procedures Act, with KRA taking into account the periods during which affected iTax services were unavailable or intermittently inaccessible.

“The Authority will waive penalties and interest accrued as a result of the system downtime in the Month of September, 2026,” KRA said.

The taxman said it would undertake the necessary system processes to ensure penalties and interest directly attributable to the verified downtime are removed.

The decision followed growing complaints from taxpayers who had been unable to access iTax as they prepared to file their returns.

KRA had earlier acknowledged the technical problem on Wednesday, advising users to try accessing its services later while its technical teams worked to resolve the disruption.

The problem mainly affected taxpayers filing VAT returns, which are ordinarily due by the 20th day of the following month.

Some taxpayers filing August VAT returns who were working towards the September 20 deadline reported being unable to access the platform for several days, raising concerns that they could be penalised for delays caused by a system they depend on to meet their tax obligations.

KRA, however, has not said that all penalties and interest appearing on taxpayer accounts during September will automatically be removed.

Its notice refers to amounts attributable to the verified period of system downtime.

The Wednesday disruption also revived concerns about the reliability of iTax, with CPA Joseph Wachira saying taxpayers and accountants had faced repeated difficulties accessing the platform.

Wachira claimed the disruptions had affected taxpayers over several months, saying accountants had been forced to repeatedly refresh the system while waiting for it to become accessible.

His central concern was whether taxpayers should be penalised when they are unable to meet filing deadlines because KRA's electronic system is unavailable.

“In my legally informed view, no taxpayer should be penalized for KRA's mistake,” Wachira said, while pointing to Section 89(5A) of the Tax Procedures Act as providing a mechanism for dealing with penalties and interest arising from electronic system failures.

The law has previously been used by KRA to provide relief following technical problems. In July 2025, for example, KRA announced that penalties and interest arising from technical difficulties affecting return filing would be waived for qualifying taxpayers.

The current KRA notice similarly invokes Section 89(5A), but applies specifically to penalties and interest arising from the verified September 2026 downtime.

Meanwhile, the Court of Appeal has issued a separate ruling concerning KRA's obligations to act within statutory tax timelines.

The appellate court held that where a taxpayer lodges an objection and the Commissioner fails to issue an objection decision within the statutory 60-day period, the objection is deemed allowed.

The judges rejected the argument that statutory deadlines could simply be suspended because related proceedings were pending elsewhere.

“It is trite that a public authority, being a creature of the Constitution and/or statute, may exercise only those powers lawfully conferred upon it,” the court said.

The court further held that statutory timelines cannot be “varied, suspended or rendered nugatory” by administrative expediency or by a Commissioner's unilateral decision to await the outcome of separate proceedings.

The dispute involved VAT refund claims exceeding Sh168 million, with some claims having remained unresolved for years.

The Court of Appeal nevertheless distinguished between judicial review of whether KRA has complied with its statutory duties and an appeal concerning the substantive correctness of a tax decision.

It did not order KRA to immediately pay the disputed VAT refunds, instead sending the remaining complaints concerning statutory timelines and fair administrative action back to the High Court for priority determination.