The Kenya Revenue Authority (KRA) has stepped up scrutiny of businesses seeking Value Added Tax (VAT) registration, amid concerns that some firms are being used to facilitate tax evasion schemes.
The Authority said certain businesses were applying for VAT registration not to meet their own tax obligations but to help other companies reduce the amount of tax they should pay through fraudulent arrangements.
Speaking during a stakeholder engagement in Machakos, KRA Commissioner for Micro and Small Taxpayers George Obell said the taxman was tightening checks to identify firms involved in suspicious VAT activities.
Obell explained that the Authority was reviewing its registration procedures to ensure businesses with genuine operations could access the service more easily while suspicious applications faced additional scrutiny.
The move comes after taxpayers raised concerns over delays in obtaining VAT registration. Some businesses have complained that the process takes too long, making it difficult for them to meet their compliance requirements.
According to Obell, KRA is working to make registration faster, particularly for established businesses whose operations and records can be verified.
“We have got this feedback from the taxpayers that it takes a long time, and so we have looked at that process to try and make it fairly easier, especially for established businesses,” he said.
He noted that applicants whose business activities are clear and verifiable would benefit from a smoother process.
However, firms whose operations raise questions will be subjected to further checks before their applications are approved.
“The ones that will take more time are the businesses that we are not sure about, but the ones we are sure about, we are making them easier to be able to get VAT registration and follow up so that you can comply,” Obell added.
KRA's approach is intended to balance easier access to tax services for genuine businesses with stronger measures against companies suspected of abusing the VAT system.
The Authority is also seeking to ensure that VAT registration is not used as a tool by businesses looking to create artificial tax arrangements or lower their liabilities unlawfully.
The tighter checks signal increased attention on VAT compliance as KRA works to protect revenue and address practices that undermine tax collection.
LINK: https://www.kenyans.co.ke/news/129321-kra-begins-crackdown-businesses-suspected-vat-fraud?fbclid=IwZXh0bgNhZW0CMTEAcGRvZgRzcnRjBmFwcF9pZA80MDk5NjI2MjMwODU2MDkAAR8OYeKlcgZkWkbk7nVjFLh4hajcom2zWEp8F4DS0GlJ7zLmy7wWjwxnRJNFtg_aem_E_DMPbIjJqRhhYPwRYQVLA
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