- The Kenya Kwanza administration aims to tighten the tax regime through the Finance Bill 2025 to curb VAT abuse.
- The Bill empowers the Kenya Revenue Authority with greater oversight and recovery powers.
- Section 66A allows KRA to recover VAT from misuse of exempt or zero-rated goods and services.
- The law targets misuse of items like medical equipment, agricultural inputs, or educational materials.
- KRA will shift from passive oversight to active recovery, conducting audits and tracking usage.
- Misuse, such as early resale of vehicles or commercial resale of medical supplies, could lead to retroactive VAT imposition.
- Zero-rated items include exports, maize and wheat flour, textbooks, and agricultural inputs.
- Exempt goods include financial services, residential rent, healthcare, education, and passenger transport.
- The Bill aligns with regional standards like the EAC Customs Management Act.
- KRA’s role will expand to include reviewing usage, enforcing repayments, auditing beneficiaries, and monitoring flagged goods.
- The Bill is part of a broader strategy to increase revenue and strengthen accountability.
Source: nairobiwire.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
