Sh19.2bn tax refunds to be paid this month

The Kenya Revenue Authority headquarters at Times Tower in Nairobi. About Sh19.2 billion in value added tax refunds will be paid this month following verification of the claimants. FILE PHOTO |  NATION MEDIA GROUP

In Summary

• “The debts will be reconciled with a view to having the claimants settle their debts with the KRA,” said the Treasury. This category, which is claiming Sh2.7 billion, owes the government Sh11 billion.
• “The second and final instalment amounting to Sh8 billion is being processed and payments will be made immediately after verification and debt reconciliation. This process is expected to be finalised before March 30, 2015,” said the Treasury.

By JOSHUA MASINDE
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About Sh19.2 billion in value added tax refunds will be paid this month following verification of the claimants.

The payments will come as a big relief to private sector investors. Some had resorted to expensive bank loans to support their businesses.

In a statement on Friday, the National Treasury said all outstanding VAT refunds of Sh19.2 billion as at the end of 2013 would be paid in full in two instalments by March 30.

The first instalment of the backlog amounts to Sh11.2 billion, but only Sh9.3 billion would be paid out after a reconciliation identifying the claimants with debts owed to the Kenya Revenue Authority (KRA). The claimants with no debts, but who are demanding Sh2.3 billion from the government are to be paid forthwith.

The amount payable to the category of claimants who have a debt of Sh2 billion owed to the taxman is Sh4.7 billion.

They will be paid Sh2.7 billion immediately after the tax authority deducts the claimants’ outstanding debt. Companies with a debt exceeding amounts payable by the KRA will be required to settle with the taxman.

SETTLE THEIR DEBTS

“The debts will be reconciled with a view to having the claimants settle their debts with the KRA,” said the Treasury. This category, which is claiming Sh2.7 billion, owes the government Sh11 billion.

“The second and final instalment amounting to Sh8 billion is being processed and payments will be made immediately after verification and debt reconciliation. This process is expected to be finalised before March 30, 2015,” said the Treasury.

“If they can clear the backlog and pay subsequent refunds on time, it would be a big relief to investors who could otherwise have resorted to expensive banks loans to support their operations,” Mr Patrick Obath, a director at the Kenya Private Sector Alliance told Nation.

Late last year, the government indicated that it would make the first payment of the VAT backlog before the end of January this year. But this did not happen as the Treasury and the taxman were verifying the list of claimants.