Changes In The VAT Refund Regime: What Next?

On 25 March 2020, a little over two weeks since Kenya reported its first case of COVID-19, President Uhuru Kenyatta publicly addressed the nation. In his address, he announced new measures as a cautionary response to the adverse economic effects that would be brought on by the unprecedented global pandemic. These measures included tax interventions that were designed with the intention of cushioning Kenyans and Kenyan businesses from these effects.

One of the measures announced was a directive to the Kenya Revenue Authority (KRA) to "expedite the payment of all verified VAT refund claims amounting to KES 10 Billion within 3 weeks; or in the alternative, allow for offsetting of Withholding VAT, in order to improve cash flows for businesses." This directive was intended to ensure that businesses remained afloat at a time when the world was grappling with an uncertain economic future that had already foretold negative outlooks on the global economy.