In a move to cap VAT non-compliance, the Kenya Revenue Authority (KRA) has rolled out the new VAT Special Table, a compliance tool fully integrated into the iTax system.
The VAT Special Table serves as a monitoring mechanism designed to flag VAT-registered taxpayers who demonstrate specific patterns of non-compliance. Once flagged, these taxpayers are restricted from filing VAT returns through the iTax portal until the issues are resolved.
The primary goal of this tool is to enhance overall VAT compliance by ensuring that those who neglect their tax obligations face immediate restrictions, thereby encouraging them to return to compliance with the law.
According to KRA, five key categories of taxpayers have been identified as eligible to fall under the VAT Special Table. These are taxpayers who consistently file VAT returns but fail to make any payments for six consecutive months, even after debt recovery efforts. Exceptions are made for those with payment plans or who have made partial payments.
Tax Invoice Management System (TIMS) or eTIMS traders who fail to transition to TIMS/eTIMS as outlined in the VAT (Electronic Tax Invoice) Regulations, 2020, also fall into this category.
Taxpayers who have not filed any VAT return for six months or more, and traders who file nil returns for six months or more, yet input tax is being claimed using their PINs, are also eligible to fall into the VAT Special Table.
However, this does not include traders who file nil returns but have no input tax claims associated with them.
Lastly, taxpayers involved in VAT fraud, particularly those found to have claimed fictitious input tax or used fictitious credit notes, are also eligible to fall into the Special Table.
According to KRA, the VAT Special Table offers benefits for both taxpayers and the tax system. The Special Table helps to reduce PIN misuse by fraudsters, helps correct VAT obligations that are no longer applicable, and encourages compliant trade by helping businesses avoid risky suppliers.
If you are listed in the Special Table, the taxpayer’s return filing is blocked, and they will receive a message from KRA stating:
“This PIN is currently under review for VAT compliance irregularities. Please contact your respective KRA Tax Service Office (TSO),” the message will read.
KRA will then review the penalties internally. Input VAT claims will also be blocked; suppliers and trading partners will not be able to claim input VAT using your PIN until the issues are resolved. If the reason you’re flagged is failure to transition to eTIMS, you must visit your TSO for onboarding support.
If a taxpayer is flagged as a Payment Returns Without Payments (PRWP) but declared the transaction in their VAT return, the taxpayer’s trading partner can still apply to their TSO to have their input VAT claim approved, provided proper documentation is submitted as required under Section 17(2) of the VAT Act, 2013.
To get out of the Special VAT Table, contact your TSO immediately for help, regularise your tax obligations, and keep your proper documentation.
