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KRA Announces Tax Amnesty, Online Bi-Monthly Auctions - Money Weekly 
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KRA Announces Tax Amnesty, Online Bi-Monthly Auctions - Money Weekly 


Welcome to yet another edition of Money Weekly where we give you a recap of the top money news from the last seven days. 

This week KRA announced a tax amnesty programme that promises non-compliant taxpayers a write off the penalties and interests accrued if they pay up what is due by June 30, 2024. 

The CBK retained the benchmark lending rate at 10.5% defying predictions and calls by the Kenyan Bankers association to increase it to stem a worrying rise in bad loans; Airbnb hosts will start paying a 2% in “Tourism Levy”, President Ruto directs ministries to cut spending by 10% as the head of public service suspends unnecessary foreign travel. 

On the cost of living side, it is emerging that Kenyans are spending upwards of 60% of their total income on food alone; consumption of fuel has fallen to a 5-year low on the back of skyrocketing fuel prices as the cost of sugar starts falling for the first time in two months.

For this and more, let’s dive into the details of the money news that topped the headlines in the last seven days.

KRA Announces Tax Amnesty Programme

The Kenya Revenue Authority (KRA) is extending an olive branch to taxpayers who did not file their taxes on time with an offer to write off the penalties and interests accrued if they pay up what is due.

KRA Commissioner General  Humphrey Wattanga says the move is in line with the authority’s commitment to enhancing voluntary tax compliance in the programme that closes on June 30, 2024. 

“In the spirit of giving back to taxpayers, we are calling on those who have accrued interests up to December 2022 to take advantage of our tax amnesty programme and pay up the principal taxes due, so that we can write off the penalties and interests accrued,” said Wattanga.

An estimated Ksh50 billion is expected to be raised from the amnesty programme.

“All taxpayers are welcome to apply for a waiver; for those who did not file their returns and accrued penalties for non-filing, they automatically qualify, and should go ahead and file their returns,” he added.

Airbnb Hosts to Pay 2% Levy

A new registration drive for the popular home-stay service popularly known as Airbnbs has been launched by the Tourism Fund in efforts to increase tax collections.

According to the Fund, only a measly 400 Airbnb hosts are formally registered in Kenya from about 400,000 hosts on the platform. 

Fund chief executive David Mwangi says discussions with the Airbnb Africa office have started to ensure all hosts are registered. 

“We urge all hosts to know that they offer accommodation and as a result are required by law to register and remit the 2% [Tourism] levy,” he said.

Ruto Directs 10% Cut in Ministry Spending

President William Ruto has ordered all ministries in his government to reduce their spending in the financial year 2023/24 by 10%. 

While making this directive during a cabinet meeting at State House, President Ruto urged agencies and departments to prevent waste and theft. 

“The Head of State has issued a warning to government officials seeking to bypass the use of a unified payment system, underscoring the necessity for better oversight,” a statement from State House reads in part.

This comes hot on the heels of yet another cost-cutting directive by the head of public service, Felix Koskei, that suspended unnecessary foreign travel by government officials. 

KRA Takes Auction of Seized Goods Online

Importers at risk of getting their uncleared goods seized by KRA have been put on notice as KRA unveils a new nationwide online auction of seized goods following a successful pilot.

Between August 14 and September 12, the KRA conducted a test auction where 104 lots at the Mombasa Port were auctioned netting Ksh37.5 million. 

According  to KRA Commissioner-General, Humphrey Wattanga,  e-action enables continuous sale of seized goods on a rolling basis. This means importers will have to clear their goods with KRA before they are put on auction much faster as compared to before the adoption of the online auction system. 

“Faster evacuation of cargo will lead to decongestion of the port of Mombasa. Previously, we would have only one auction per month at the port, but with the implementation of the e-auction system, we are now able to schedule at least two auctions in a month with goods from across the country,” said Mr Wattanga.


Loan Defaults Hit 16-year High

It’s a tough time for Kenyan borrowers as defaults on bank loans rose to Ksh596 billion in August setting the stage for a fresh round of property seizures and auctions by lenders keen on recovering bad loans. 

According to data from the Central Bank of Kenya (CBK), non-performing loans (NPLs) rose to 15% in August, up from 14.5% in July 2023, the highest in 16 years. An increase in bad loans was noted in the manufacturing, real estate, quarrying, mining, building and construction sectors. 

This default rate that was last registered in June 2007, in part, has been attributed to rising interest rates on commercial bank loans amid the rising cost of living. 

CBK Retains Benchmark Rate

This comes even as the CBK’s Monetary Policy Committee (MPC) retained the benchmark lending rate at 10.5% despite speculations that it would increase it by at least 100 basis to stem inflation. 

The Kenya Bankers Association (KBA), the banking sector lobby group, had last week also urged the CBK to increase the benchmark rate to arrest the worrying rise in non-performing loans.  

KBA argued a further increase in the benchmark lending rate, that was in August also left at 10.5%, would lower demand for credit preventing a further growth in bad loans. 

While retaining the current base lending rate, the MPC noted that inflation was expected to remain within the targeted range supported by lower food prices. 

Banks Abandon Cost of Credit Tool

With no end in sight for increasing bank interest rates, a report by the Business Daily indicates that commercial banks are not adequately updating a publicly accessible tool meant to inform consumers on the cost of loans they offer.

The cost of credit website fronted by the Kenya Bankers Association (KBA) in collaboration with the CBK in June 2017 was meant to help consumers compare loan prices across commercial banks. 

But, according to the report, there have been delays in updating the website, effectively inconveniencing borrowers keen on getting the best commercial bank loan based on interest rate and fees. 

“The website is working but we have to ensure that we are continuously improving it. We want to put in a mechanism of ensuring that the website is up to date and that at any point in time periodically, say monthly, banks can commit that the numbers are still current,” KBA CEO Habil Olaka is quoted by the Business Daily., Kenya’s first financial marketplace, is one alternative consumers can use to compare financial products available in the Kenyan market including personal loans, business loans, credit cards, current accounts, savings accounts, logbook loans and more.

CBK joins the African Payments and Settlement network

The CBK is the newest member of the Pan African Payments and Settlement System (PAPSS) - a platform that allows member countries to trade with each other in local currencies without needing to make any conversions into hard cash. 

This membership allows Kenyans businesses to conduct trade and financial transactions seamlessly with others, a major boost to the African Continental Free Trade Area (AfCFTA).

Other Central Banks that have already joined PAPSS include; Nigeria, Liberia, Guinea, Djibouti, Gambia, Sierra Leone, Zimbabwe, Ghana and Zambia. 

Already several banks operating in Kenya are in the PAPSS network. These include Standard Chartered, Ecobank and KCB. By the end of 2025, all commercial banks in Africa are expected to be members. Currently 28 banks have already joined the network. 


Cost of Living Hits 5-year High With Fuel Consumption at 5-Year Low

In 2022, Kenyans experienced the highest cost of living in five years, despite barely any changes in income levels.

This is according to the Kenya Economic Report 2023 published by the Kenya Institute for Public Policy Research and Analysis (Kippra). The report shows the Consumer Price Index (CPI) hit 7.7% - the highest since 2018. 

This is as compared to 6.1% in 2021, 5.4% in 2020, 5.2% in 2019, 4.7% in 2018 and 8.1% in 2017. The maximum target by the government is 7.5%. 

According to the report, real earnings - a measure of the purchasing power of the average wage - dropped by 3.8% in 2022, with the real minimum wage declining by 6.7%.

Worrying, lower income households were hardest hit, facing an average inflation of 8.1% between January and December 2022. This is as compared to 6.0% and 5.6% inflation experienced by their middle- and upper-income counterparts over the same period. 

Families in Western Kenya spend 67% of income on food - report

The Kippra report further shows the effects of the rising cost of living on lower-income households with families in Western and Nyanza regions spending nearly 70% of their income on food. 

Despite forming part of the country’s food basket areas, residents in all counties in these regions spent an average of 67% on food in 2022.

The report further shows that nationally, households in rural areas spend over 60% of their income on food as compared to 48.8% of total income that was spent on food by households in urban areas. 

Food prices increased by 35% between 2019 and 2022. 

As Kenyans Keep Cars Home, Fuel Consumption Drops to 5-year Low 

The consumption of fuel in Kenya between the months of January and June 2023 dropped to the lowest levels in over 5 years - save for the 2020 Covid-19 period - as fuel prices skyrocketed, depressing demand and pushing car owners to use public transport. 

Data quoted by the Business Daily show the consumption of Super Petrol fell 5% to 1.01 billion litres from the 1.074 billion litres consumed in 2022 over the same period while that of Diesel dropped 4% to 1.31 billion litres from 1.36 billion litres previously. 

Other Money News

  • Sugar prices started stopping in August for the first time in two months on the back of doubled imports that have covered a supply gap occasioned by a drop in local production. Spot checks by the Daily Nation on Tuesday show a kilo was retailing at between Ksh210 and Ksh220. 
  • The monthly value of bonds traded at the Nairobi Securities Exchange (NSE) hit a two-year high in September as investors sought to secure high-yielding securities issued recently by the government.
  • Starting November, Netflix is discontinuing its free plan in Kenya cutting off thousands of subscribers who have enjoyed complimentary access since 2021.
  • Kenya Power wants to clear the electricity connection backlog across the country within 90 days, Managing Director Joseph Siror has said. This is as it emerges that more than 236,900 Kenya Power customers are waiting for connection to the grid over a shortage of metres.
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Eric Ndubi is the Managing Editor at Money254. He holds an MSc in Media and Communications from the London School of Economics and Political Science. Prior to leading Money254's editorial team, he worked as the Editor at, social media manager at Citizen TV and editorial manager at You can find him on twitter @Eric_Ndubi

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