The Ministry says they have concluded the verification exercise that established that the government owes investors Sh19.2 billion in VAT refunds which dates to December 13, 2013.
“The National Treasury says the first installment amounting to Sh11.2 billion, has been processed and verified and Sh 9.3 billion, is payable,” said statement in the dailies on Friday.
The Sh9.3 billion will be paid in three categories. First, it will be to those claimants who have no debt who will be directly be paid Sh 2.3 billion.
The second category is those with debts, but have a positive balance. The amount they expect to get is Sh 4.7 billion but will be deducted Sh 2 billion as debt, hence getting the remaining Sh 2.7 billion.
“The debt will be reconciled by KRA and any payable amount paid immediately.”
The third and final category is to those claimants whose debt is more than what is payable to them. The amount payable to this category is Sh 2.7 billion, but the debt amounts to Sh 11 billion.
“The debt will be reconciled with a view to having the claimants settle their debts with KRA,” the Ministry says.
Treasury says the second and final instalments amounting to Sh 8 billion is being processed and payments will be made immediately after verification and debt reconciliation are finalized.
This whole process is expected to be finalized before March, 30 2015.
Reacting to this announcement the Kenya Private Sector Alliance (KEPSA) has lauded the governments move to clear the VAT backlog.
“We, the Kenya Private Sector Alliance commend the move by the National Treasury and KRA to resolve this outstanding issue and look forward to collaborating with both Treasury and KRA to drive the tax reform agenda as we strive to market Kenya as an investor friendly destination.”