KRA is now out to hunt firms that are consistently filing NIL returns or without VAT at all. This is a part of the occasional taxpayer register clean-up exercise.

Kenya Revenue Authority now says firms who have never filed returns or consistently filed nil returns will be locked out of filing new returns or amended returns.

Moreover, the ‘defaulting taxpayers’ pin shall be rejected by the Kenya Revenue Authority even for other taxpayers.

The taxman shall however allow taxpayers to settle any outstanding obligation in regard to the VAT liabilities.

In a previous memo dated August 5 , the Kenya Revenue Authority stated that a considerable number of taxpayers in the taxpayer register are either not filing returns or consistently filing Nil returns thereby defaulting on their VAT obligations.

“A significant number of taxpayers with VAT obligations exist in the taxpayer register but are either not filing their monthly VAT returns or consistently file nil VAT returns,” KRA said in an internal memo to staff dated August 5.

Get To Know All About VAT In Kenya.

Value Added Tax is a consumption tax imposed whenever a value is added on applicable goods and services at each stage of the supply chain from production to consumption.

 The government levies tax on traders with a turnover of over five million to enable it to administer its key functions.

In Kenya, the collection and levying of tax is the mandate of the Kenya Revenue Authority.VAT is levied under the VAT Act 2013 and the VAT regulations, 2017.

Traders with a turnover of less than five million can register for VAT on a voluntary basis.

Once registered the traders have to file returns on or before the 20th of each month regardless o whether sales have been made or not.

Some goods however are usually exempted from the VAT tax milk, eggs, meat, rice, maize, bread, beans, unprocessed vegetables, tubers, infant food formula, medicines, fertilizers, sanitary towels, pharmaceuticals, and so forth.

All traders are required to purchase the Electronic Tax Receipt from the KRA  to record sales. This way the calculations of actual tax from the sales made are made even easier.