SMEs get Sh6.2b from KRA in VAT refund
The Kenya Revenue Authority (KRA) has refunded Small and Medium Enterprises (SMEs) Sh6.2 billion in Value Added Tax (VAT) between July and October 2019.
Cumulatively, the tax man has paid the MSMEs a total of Sh20.4 billion for the financial year 2018/19, having earlier refunded the organisations Sh14.2billion.
In a joint communique signed by KRA and Kenya Private Sector Alliance chiefs, Githii Mburu and Nick Nesbitt, KRA said it had established a project team to facilitate the clearance of 6,000 VAT refund cases worth Sh27.6 billion which has been outstanding since October 31, 2019, by April next year.
The communique was issued after 5th round table meeting between KRA and KEPSA on Thursday.
According to the communique, KRA has developed a Green Channel approval framework to facilitate expedited payment of low-risk refunds. Already, 270 taxpayers have been on-boarded on the channel.
The forum brought together business leaders and stakeholders’ drawn from the private sector to deliberate on the prevailing tax policy and related concerns.
It also provided a platform for KRA to update KEPSA members on developments relating to tax compliance and policy matters.
Other measures the tax man is undertaking to address private sector concerns include testing a Tax System enhancement to enable refunds application for credits arising from withholding VAT; a System integration (iTax and ICMS) to facilitate faster refund claims processing and timely verification; Withholding VAT reduction from 6 per cent to 2 per cent expected to unlock funds held in VAT credits and a Legislative change to allow refund of withheld VAT to improve cash flow.