- The Tax Appeals Tribunal held that excess VAT credits can be used to offset outstanding tax liabilities under Section 47 of the Tax Procedures Act.
- In Easton Petroleum Ltd v KRA, the taxpayer had KES 19.7 million in VAT credits against an outstanding VAT debt of KES 12.9 million, and had applied for set-off.
- The Tribunal said KRA should properly consider a valid set-off application before taking enforcement action like agency notices.
- The ruling suggests excess input VAT is not automatically barred from being applied to other liabilities if the taxpayer follows the statutory set-off process.
- Taxpayers should reconcile balances, keep evidence, and submit clear set-off requests showing the credit, liability, amount to offset, and legal basis.
Source: globaltaxnews.ey.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.
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