Money Markets
The Kenya Revenue Authority headquarters at Times Towers. PHOTO | FILE
By LYNET IGADWAH, ligadwah@ke.nationmedia.com
In Summary
The government has said it will
begin immediately the clearance of value added tax (VAT) refund claims
backlog, offering relief to firms facing cash flow problems due to the
delays.
The National Treasury and the Kenya
Revenue Authority said a verification exercise revealed that the refunds
backlog had grown to Sh19.2 billion by the end of 2013.
The settlements will be made in two instalments and will be concluded by the end of March.
The Kenya Association of
Manufacturers (KAM) has welcomed the move saying it raises optimism in
the sector especially for firms that have borne the pain of delays.
KAM CEO Betty Maina, however,
noted that liquidity in the sector had greatly been compromised in the
five years that the refunds have been pending.
“This is one of the factors that
has affected the growth in the industrial sector and has mired us in
debt so manufacturers are wondering how to pay up interest on the loans
that they took to keep afloat,” said Ms Maina.
In a press release in the local
dailies Friday, the government said Sh11.2 billion of the claims has
been processed and verified and Sh9.3 billion is payable in the first
instalment after debt reconciliation.
The Kenya Private Sector Alliance
lauded the move saying it is a fulfilment of the commitment made by
President Uhuru Kenyatta during a Kepsa presidential roundtable last
year.
The second instalment of Sh8 billion will be paid after verification and debt reconciliation are finalised.
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