Section 21

Interest for late payment of tax (TPA 2nd Sch Para 13)

(1) Where any amount of tax remains unpaid after the date on which it becomes payable under section 19, an interest equal to two percent per month or part thereof of the unpaid amount shall forthwith be due and payable. 

(2) Any interest charged under subsection (1) shall, for the purpose of this Act relating to the collection and recovery of tax, be deemed to be tax and any interest which remains unpaid after becoming due and payable under subsection (1) shall attract further interest equal to two per cent per month or part thereof: Provided that the interest chargeable under this subsection shall not exceed one hundred percent of the tax originally due. 

(3) The Commissioner may, upon application by a person from whom any interest is due under subsection (1) or (2), grant remission of the whole or part of the interest due, if satisfied that such remission is justified, and shall make quarterly reports to the Cabinet Secretary on the remission granted under this subsection: 
Provided that where the amount of interest exceeds one million five hundred thousand shillings, remission shall be subject to the prior written approval of the Cabinet Secretary. 

(4) Upon receipt of an application under subsection (3), the Commissioner shall, where the applicant has paid the principal tax in full, suspend the charging of the interest pending the determination of the application. 

(5) Where the remission under subsection (3) is not granted or is granted in respect of only part of the interest, the balance of the interest shall become due and payable within ninety days of the determination of the application. 

(6) If the balance of the interest payable under subsection (5) remains unpaid after the expiry of the prescribed period, a surcharge at the rate of two percent per month or part thereof, shall forthwith be due and payable. 

(7) The Commissioner shall maintain a public record of each remission together with the reasons thereof which shall be reported to the Auditor General on a quarterly basis.

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