AFS – Your professional; Tax, Trade, and Investment, advisor is here to walk with you to demystify the ignominious VAT Special Table.
What is the VAT Special Table?
Having observed a steady surge in the number of taxpayers with VAT obligations in its registers, KRA made a policy decision in August 2022 to de-activate accounts of businesses that have VAT obligation but had persistently filed NIL returns for the last six months or so consistently. This decision was taken to flag out consistent NIL filers or absentee filers with the aim of KRA cleaning its Registers and also enhancing tax compliance.
What are some of the factors that make businesses to be listed in the VAT Special Table?
- Lack of consistent Business or lack of Payments from buyers/Customers
- Lack of payments from suppliers who are already in the VAT Special table.
- Traders having registered for VAT as an obligation by error
- Tax Payer’s PIN might have been used by someone else or another firm without the primary owner’s knowledge.
- Construction firms, without consistent payment flows or evidence of the supplies/ suppliers’ invoices etc
- Firms that might have already wound up but the information has not been made known to the Registrar of companies or the KRA.
What happens when an individual’s or Business’ PIN is listed in the VAT Special Table?
This decision has the effect of delisting the PIN and thereby cutting off the firm from undertaking critical transactions like:
- Cannot open or operate bank accounts
- Cannot transfer property
- Cannot claim Input VAT on purchases
- Cannot file VAT Returns (The system displays an alert “This Pin is currently under review for VAT compliance irregularities”.
- Traders cannot claim input tax from a firm which is listed under the VAT Special Table. Instead, the system will give the following alert, “This PIN is not liable to input tax How does the Firm get out of the VAT Special Table?
How does one get out of the VAT Special Table?
The first move is to visit the nearest KRA Tax Service Office.
- The TSO Manager will guide based on every case and its merits Identified or affected taxpayers will be evaluated specific to their own cases.
- The TSO Manager can authorize a payment plan arrangement so that the taxpayer is able to operate.
- The TSO Manager may request for the following documents;
- The bank Statements for up to 5 years prior
- An affidavit under oath confirming the lack of a given project.
- Any application and authorization granted for the firm to go into dormancy
- Any application/authorization granted removing the firm from VAT obligation.
Conclusion
AFS as your Tax Consultants, remain at your service and convenience to guide you through all these stages required under the VAT Special Table to restore your Business PIN Status back to activity.
