- Expansion of VAT Scope: The Finance Bill 2025 proposes to include digital services from nonresident suppliers under VAT, requiring them to register and comply with VAT regulations in Kenya. This expansion aims to capture a broader range of digital transactions.
- Revisions to VAT Refund Processes: The Bill seeks to reduce the timeline for lodging VAT refunds from 24 months to 12 months, as well as shorten the time limit for claiming VAT on bad debts from three years to two years, streamlining the refund process for businesses.
- Amendment of VAT Status for Various Goods: The Bill aims to change the VAT status of multiple items, moving certain previously exempt goods to taxable status at a rate of 16%, which could increase costs for consumers and necessitate VAT registration for suppliers of these goods.
Source EY
