Kenya: KRA Plans Reforms to Make VAT Leading Tax Category Source

By Kevin Rotich

Nairobi — The Kenya Revenue Authority (KRA) seeks to make the value-added tax (VAT) category the leading source of tax for the country through digital reforms.

Medium and Small Taxpayers Commissioner George Obell gave the example of Kenya's electronic Tax Invoice Management System (eTIMS), a platform that has significantly boosted VAT compliance, reduced fraud, and enhanced revenue performance.

eTIMS has enabled real-time transaction monitoring and automated enforcement, helping KRA detect and block fictitious claims and fraudulent invoices.

"The VAT system in Kenya is undergoing a revolution," said Commissioner Obell at the African Development Bank's VAT Digitization Seminar held in Nairobi.

"Our goal is for VAT to become the most reliable and highest-yielding taxhead. VAT is paid by consumers, businesses are simply agents. When the system is misused, the public and the government both lose," he added.

In the 2023/25 fiscal year (FY), domestic VAT collection grew to Sh314.157 billion compared to a similar period in the 2022/23 FY, buoyed by the implementation of eTIMS.

However, customs revenue eclipsed VAT generation with a Sh791.368 billion collection during the period.

"The merchants won't have to go through hoops anymore, they just click and file," said Obell, referring to the streamlined VAT return process being upgraded.

Read the original article on Capital FM.

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