Project Published: February 14, 2024
How Taxpayers Can Be Removed From The VAT Special Table
Are you trying to file VAT returns but are instead getting the message: “This PIN is currently under review for VAT compliance irregularities. Please contact your respective Kenya Revenue Authority (KRA) Tax Service office (TSO).”? Well, you may have been added to the VAT special table. But don’t worry! We’ll help you figure this out, resolve the issue, and get your business back on track.
What you need to know:
1. KRA has implemented the VAT special table, where certain categories of VAT-registered taxpayers are restricted from performing certain processes on the KRA portal, such as filing VAT returns and claiming input VAT.
2. Taxpayers on boarded onto the VAT special table will be required to provide a checklist of documents to the KRA for reactivation and removal from the VAT special table.
The VAT special table is unfortunately not akin to the special tables in school where students are rewarded with delicacies for doing something good. It is a mechanism implemented in iTax by the KRA to enhance VAT compliance, where certain categories of VAT-registered taxpayers are restricted from performing certain processes.
Categories of Taxpayers Onboarded Onto The VAT Special Table
The categories of taxpayers on boarded on the special table are:
1. Payment Returns without Payments (PRWPs): These are taxpayers who have filed returns and not made payments for 6 months, and all efforts have been made to collect the debt through the prescribed debt collection or enforcement measures, or the taxpayer cannot be traced. However, exceptions shall be made for those who have entered into a payment plan or made partial payments.
2. TIMS/eTIMS Non-Compliant Traders: These are VAT-registered taxpayers who have not complied with the Value Added Tax (Electronic Tax Invoice) Regulations of 2020 requirement to transition from ETR to TIMS/eTIMS.
3. Non-filers: taxpayers who have not filed returns for a period of 6 months or more.
4. Nil filers: Taxpayers who are perpetual nil filers.
5. Missing Traders: Taxpayers who are filing and paying VAT but, on investigation or through an audit, were found to be involved in VAT fraud, such as the claim of fictitious input taxes.
Limitations for Taxpayers on The Special Table
When a taxpayer is on boarded on the VAT special table;
1. The taxpayer will be restricted from filing VAT returns on iTax, issuing VAT invoices, registering new suppliers, and making amendments to their VAT registration details.
2. Traders will not be able to claim input tax from them.
Benefits Of The Special Table
While the VAT special table is proving to be a stumbling block for restricted taxpayers, the mechanism simplifies tax calculations and promotes transparency for all. The VAT special table bears the following benefits to KRA and taxpayers:
1. Reduces cases of abuse of traders’ PIN by fraudulent persons;
2. Identifies erroneously added VAT obligations or VAT obligations that are no longer required; and
3. Enables traders to conduct business with compliant suppliers.
Consequently, this innovative resource offers a clear and standardised format, making it easier for taxpayers to determine their VAT obligations accurately. By following the guidelines provided, businesses can fulfil their tax obligations with confidence.
Removal From The VAT Special Table
For taxpayers onboarded on the VAT special table, there is light at the end of the tunnel. The KRA provides a checklist of documents required for VAT reactivation and removal from the VAT special table. After the provision of documentation and verification by the KRA, an interview is conducted at their premises. This is to ensure compliance. Lastly, VAT reactivation is approved, hence removal from the special table.
Note that for reactivation purposes, the documentation must provide proof that the taxpayer is dealing with Vatable supplies or goods, and that the taxpayer intends to continue dealing with Vatable supplies or goods. For any new taxpayers registering for the VAT obligation, the requirement is that, in addition to providing the documentation listed as per the KRA VAT registration checklist, you must comply with the new eTIMS requirements.
Penalties charged for non-filing of VAT returns where a taxpayer has been placed in the VAT special table shall be addressed administratively. Therefore, taxpayers on boarded onto the special table will be required to contact their Tax Service Office for guidance on removal from the VAT Special Table. Alternatively, taxpayers can also consult tax experts in Kenya such as Taxaffix Limited for advice and compliance on the same.
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