Kenya VAT Act 2013 Amendment: Refunds and Offset

The Statute Law (Miscellaneous Amendments) Act, 2019 which was signed into law on 5th July 2019 has introduced amendments to the Value Added Tax (VAT) Act 2013 effective 23rd July 2019. 

Key highlights of this amendment include:

  • Registered taxpayers can now apply for a refund of VAT credits arising from zero-rated supplies, Input or Withholding VAT, erroneous VAT payment and bad debts written off.
  • ¬†Registered taxpayers can now offset VAT credits against other tax obligations payable (PAYE, Income Tax)
  • The time period allowed for the application of VAT refunds has been extended from 12 months to 24 months
  • VAT credits accumulated over a 36 month period prior to 23rd July are now claimable

In our view, this amendment is a step in the right direction and it will generally reduce working capital and cash flow challenges for SMEs. In particular, registered taxpayers making zero-rated supplies (mostly exporters) are set to benefit by offsetting VAT credits against PAYE and Income Tax obligations. 

Learn more by clicking this link Kenya VAT Refunds and Offsets.