KRA Waives Penalties After September iTax Outages: What Taxpayers Need to Know

• KRA's 16 September 2026 notice waives penalties and interest that accrued as a result of iTax downtime in September 2026.

• Scope is limited to verified periods when filing and payment services were unavailable or intermittently accessible.

• Legal basis: Section 89(5A) of the Tax Procedures Act. The Finance Act, 2026 separately allows waivers of up to KES 2 million for electronic system errors.

• KRA will identify affected periods through its own system processes and match penalties against confirmed downtime.

• VAT filers were hit hardest ahead of the 20 September deadline. Some taxpayers say glitches began in April and question the September-only scope.

• Keep evidence: screenshots, support tickets, correspondence and payment attempts will support any follow-up waiver request.

In a public notice issued on Wednesday, 16 September 2026, the Kenya Revenue Authority said it would waive penalties and interest that taxpayers incurred because of intermittent downtime on the iTax portal. The outage affected the normal functioning of return filing and payment services, and the waiver covers penalties and interest that accrued as a result of the system downtime in September 2026.

The relief is deliberately narrow:

KRA said it would review penalties and interest incurred by taxpayers against the confirmed periods of downtime when processing the waiver. It apologized for the inconvenience and said it was working to improve the reliability of its digital services.

Two gaps remain. The notice did not state how long the disruption lasted, and it did not publicly confirm that all affected services had been fully restored.

KRA grounds the waiver in Section 89(5A) of the Tax Procedures Act, 2015. Section 89 is the provision that governs the Commissioner's power to waive penalties and interest.

The waiver also sits against the Finance Act, 2026, which took effect on 1 July. Among its Tax Procedures Act amendments, the Act gives the Commissioner express power to waive penalties or interest of up to KES 2 million where the liability arises from an error generated by an electronic tax system. Commentators have welcomed it as a response to the increasing digitisation of tax administration, covering technical failures, system-driven filing errors and electronic invoicing discrepancies.

Two features of the September waiver stand out:

• It is Commissioner-led. KRA says it will itself run the system processes to identify affected periods and remove qualifying penalties and interest. The notice does not require taxpayers to apply.

• It is causal, not blanket. Only penalties and interest attributable to the verified downtime are covered. A late return or payment that would have been late regardless of the outage does not qualify, and not every penalty incurred in September will be cancelled.

VAT filers against the 20 September deadline. The outage struck days before 20 September, the deadline for filing and paying VAT for August. On 16 September KRA confirmed that it was experiencing intermittent disruptions to iTax and that technical teams were working to restore service. It advised users to try again later. VAT registrants were among those who reported being unable to access the platform or complete transactions.

eTIMS invoice concerns. Some taxpayers also raised a related problem: genuine eTIMS invoices that had not been transmitted to KRA's systems. Because VAT returns rely increasingly on invoice data held by KRA, missing invoices can change the input VAT a business is able to claim and therefore the VAT it pays.

Why only September? Reaction to the waiver was mixed. Some taxpayers welcomed it as KRA listening to its users. Others questioned why relief was limited to September, saying they had experienced iTax glitches since April. Some also asked whether the problems had actually been resolved. As announced, the waiver does not reach penalties or interest from outages in earlier months.

The waiver is applied by KRA against its own record of downtime. Taxpayers still have good reason to protect their position, because the outcome depends on whether a specific penalty is traced back to a verified outage.

1. Check your ledger once the waiver runs. Review your iTax ledger for penalties and interest on September obligations, including VAT for August due on 20 September. Confirm whether they have been reversed.

2. Assemble evidence of failed attempts. Useful records include:

• dated screenshots of error messages or unavailable pages;

• support tickets, emails and chat logs with KRA;

• call records with the KRA Contact Centre;

• payment-gateway or bank records showing attempted payments; and

• internal logs showing when the return was ready to file.

Evidence of this kind shows that a delay was caused by the system rather than the taxpayer.

3. Follow up where a penalty remains. If a penalty that stems from the outage is not reversed, raise it with KRA and present the evidence. The Commissioner's new power to waive penalties and interest up to KES 2 million for electronic system errors gives a clear statutory footing for the request.

4. Consider earlier outages separately. The September notice does not cover problems in earlier months. Taxpayers with evidence of system failures in those months can still apply to the Commissioner for a waiver. The express system-error power took effect with the Act on 1 July 2026, so applications for earlier periods should be framed with that date in mind.

Contact. KRA directs taxpayers seeking help to its Contact Centre on 020 4 999 999 or 0711 099 999.

For finance teams. Do not rely on the waiver as a filing strategy. File and pay as early as possible ahead of statutory deadlines, especially the 20th-of-the-month VAT deadline, so a short outage does not become a missed obligation. Treat evidence capture during outages as a standard control, not an afterthought.

For tax advisers. Diary a review of client iTax ledgers after KRA completes its reconciliation. Prepare waiver requests for any residual penalties linked to the outage. Where eTIMS invoices failed to transmit, reconcile supplier invoices against the data KRA holds before filing, so that input VAT claims are not understated.

For the wider system. Section 89(5A) and the Finance Act's system-error waiver power give KRA a statutory route to relieve taxpayers when its own technology fails. How consistently and transparently KRA uses that route, particularly for outages outside September, will shape taxpayer confidence in an increasingly digital tax administration.

Does KRA's iTax penalty waiver apply automatically? KRA says it will run its own system processes to identify the affected downtime periods and remove qualifying penalties and interest. Taxpayers should still check their iTax ledger and keep evidence in case a penalty is not reversed.

Which penalties does the September 2026 waiver cover? Only penalties and interest that accrued as a direct result of the iTax downtime in September 2026, during verified periods when filing or payment services were unavailable or intermittently accessible.

What is the legal basis for the waiver? KRA relies on Section 89(5A) of the Tax Procedures Act. The Finance Act, 2026 also allows the Commissioner to waive penalties or interest of up to KES 2 million arising from errors generated by an electronic tax system.

Are iTax outages before September covered? No. The notice is limited to September 2026. Taxpayers affected by earlier disruptions can apply to the Commissioner for a waiver, supported by evidence.

Who do I contact about an iTax penalty? The KRA Contact Centre on 020 4 999 999 or 0711 099 999.