NAIROBI, Kenya, Oct 26 – The Kenya Revenue Authority (KRA) has warned businesses that claim input VAT without proper proof of payment, saying such firms will face stricter audits as part of an intensified tax compliance drive.
KRA Chairperson Ndiritu Muriithi said several companies have been exploiting system loopholes to make unverifiable VAT claims that lower their tax obligations.
“For us to accept that you paid input VAT, we must see proof of payment. If we can’t see it, you must show us where it went,” Muriithi said.
He revealed that between March and April 2025, about 9,000 businesses reported Sh39 billion in input VAT, but KRA could not verify the transactions.
“So we asked these businesses to show us. We are not out to get anyone, but we must see what you are claiming,” he added.
KRA has since set up a special review unit to track suspicious claims and flag suppliers linked to unverifiable VAT transactions.
The move is part of wider tax digitisation reforms, including a proposal to automate VAT collection via mobile money transactions. The tax agency said the system will improve transparency and seal revenue leaks while assuring taxpayers that KRA will not access bank or wallet accounts.
