Section 89

General provisions relating to penalty 

(1) Each penalty shall be calculated separately with respect to each section in this Division.

Finance Act, 2018 Effective 1st July 2018
(2) If the same act or omission imposes more than one penalty under a tax law on a taxpayer, the Commissioner may shall determine which penalty applies.

(3) A person shall be liable to a penalty only when the Commissioner notifies in writing that person of a demand for the penalty setting out the amount of the penalty payable and the due date for the payment being a date that is at least 30 days after the date of the notification.

(4) Subsection (3) applies also to a penalty imposed under a tax law other than this Act.

(5) A penalty payable by a person shall be due and payable on the date specified in the notification under subsection (3).

(6) A person liable to a penalty may apply in writing to the Commissioner for the remission of the penalty or interest payable and such application shall include the reasons for the application. Finance Act 2016 Effective 1st January 2017  (Finance Act 2023 wef 1st-July-2023 s65 )


(7) The Commissioner may, upon an application under subsection (6) or on the Commissioner’s own motion and with the approval of the Cabinet Secretary, remit, in whole or in part, any penalty or interest payable by a person except a penalty imposed under section 85, 

Provided that the remission of interest is by reason of – 
(a) uncertainty as to any question of law or fact; 
(b) consideration of hardship or equity; or 
(c) impossibility or undue difficulty or expense, of recovery of tax. ss-Deleted by   Finance Act, 2018 Effective 1st July 2018 

(7) The Commissioner may, upon an application under subsection (6) or on his own motion, remit in whole or in part, any penalty or interest payable by a person, except a penalty imposed under section 85, if satisfied that the remission is by reason of—

• (a) consideration of hardship or equity; or 
• (b) impossibility or undue difficulty or expense, of recovery of the tax: 

Provided that the Commissioner shall—

• (i) where the amount of the penalty or interest exceeds one million five hundred thousand shillings, seek prior approval of the Cabinet Secretary; and 
• (ii) make quarterly reports to the Cabinet Secretary on the remissions granted under this section.

ss-Deleted by (Finance Act 2023 wef 1st-July-2023 s65 )

(8) The Commissioner shall maintain a public record of each remission together with the reasons for the remission and the record of remissions shall be reported to the Auditor-General once in every three months.  ss-Deleted by (Finance Act 2023 wef 1st-July-2023 s65 )

(9) This Act shall not preclude the imposition of penalty under any other tax law and the same act or omission shall not be subject to—

• (a) the imposition of a penalty under more than one provision of that other tax law; or
• (b) both the imposition of a penalty and prosecution for an offence under that other tax law.

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