15 April 2019

Kenya: Taxman Sets Month-End Deadline for Release of Sh2 Billion Refunds

Manufacturers could soon enjoy better cash flow after the government pledged to release Sh2 billion VAT refunds by month-end.

This follows a Kenya Private Sector Alliance (Kepsa) and Kenya Revenue Authority (KRA) boards meeting Monday that in a joint statement called for a review of the VAT refunds process to facilitate faster disbursements.

The teams also resolved that Customs Management Systems (iCMS) and iTax systems be integrated to enable filing of VAT refund claims online where the KRA systems process and send a confirmation report to the manufacturers.

Manufacturers say they are owed about Sh20 billion, denying them opportunities to expand, pay suppliers, transporters, and workers on time.

Filing returns on tech platforms would reduce compliance costs to business, they said.

Manufacturers have in the past said manual processing saw manufacturers spend many hours filling papers and moving from office to office to verify each of the claims.

On the Mombasa Port clearance problem, the boards said the number of agencies involved should be reduced from 27 to four, also cutting logistical costs.

Kenya is stuck with a slower process of clearing imports from the port, especially after the government activated re-inspection of cargo to ascertain quality. This has meant payment of double inspection fees, added storage and demurrage charges coupled with increased taxes.

This makes Kenyan exports uncompetitive, they said.

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