Treasury is set to release sh 12.2 billion to Kenya Revenue Authority to help hasten payment of Value Added Tax (VAT) refunds to the business community.
This moves comes in response to a complaint by the business community that the delay in payment of VAT refunds was affecting the delay in payment of VAT refunds was affecting their their cash flows and hence business operations.
Finance minister Mr. Uhuru Kenyatta, has directed that all outstanding refunds, which have been audited and verified as payable by the end of June be paid before the end of July. Furthermore , the minister directed that claims which me t the low risk criteria be paid within 3 months without a requirement for audit.
KRA owes sh 6 billion to Kenya Association of Manufactures (KAM) and Fresh Produce and Exporters Association of Kenya(FPEAK) members.
However, KRA has maintained that the increase in the refundable backlog has been as a result of treasury allocating inadequate funds, the ever growing list of zero rated products and introduction of withholding tax regime in 2003.
Fast payment of VAT refunds will offer the businesses community an opportunity to improve cash flows, improve their production capacity, create more jobs, and add impetus on the on going economic recovery.
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