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The Kenya Revenue Authority (KRA) has unveiled a significant update aimed at simplifying the VAT return filing process for VAT-registered taxpayers.
A VAT-registered taxpayer is an individual, business, or entity that meets the criteria for VAT registration set by KRA.
Any person or entity that supplies or expects to supply taxable goods or services worth Sh5 million or more annually is required to register for VAT.
This new measure, which comes into effect starting with the November 2024 tax period, will see VAT returns pre-filled with tax information already available to KRA.
This initiative is intended to ease the administrative burden on taxpayers while improving compliance and accuracy in VAT declarations.
Details of the Update
The KRA stated that all VAT-registered taxpayers will have their returns pre-filled based on tax data currently in the authority’s records.
Taxpayers are, however, required to review the pre-filled returns for accuracy before submitting them.
The submission deadline for VAT returns for the November 2024 period is December 20, 2024.
Taxpayers must ensure they confirm and finalise their pre-filled returns by this date to remain compliant.
Reminder of Taxpayer Obligations
In the same notice, KRA reminded all taxpayers of their legal obligations under the VAT Act. These include:
Issuing Electronic Tax Invoices: Taxpayers must use electronic tax invoice systems in accordance with the law.
Transmitting Invoice Data to KRA: All invoice details must be transmitted to KRA through TIMS (Tax Invoice Management System) or eTIMS.
Validation of VAT Claims: Input VAT claims must be validated through TIMS/eTIMS or backed by customs import declarations. Any VAT claims that are not validated using these methods or that contradict customs import declarations will not be considered for deductions in the return filing process.
Support for Taxpayers
KRA has committed to supporting taxpayers as they transition to this simplified system. The notice highlighted the agency’s plans to continue conducting awareness and sensitisation initiatives to educate taxpayers about the new process.
In addition to the sensitisation programs, KRA reassured taxpayers of its continued support to help them comply with the requirement to use electronic tax invoices.
This simplification of VAT return filing is part of KRA’s broader strategy to enhance taxpayer experience and improve efficiency in tax administration.
The authority urged all taxpayers to take full advantage of the pre-filled return system, review the information carefully, and adhere to the submission timelines to avoid penalties.