The Kenya Revenue Authority (KRA) has implemented a monitoring mechanism known as the VAT Special Table aimed at enhancing compliance among VAT-registered taxpayers. This table flags taxpayers who show specific patterns of non-compliance, temporarily restricting their ability to file VAT returns through the iTax portal until issues are resolved.
Who Gets Flagged?
Taxpayers can be added to the VAT Special Table under five main categories:
- Payment Returns Without Payments (PRWPs): These are taxpayers who consistently file VAT returns without remitting any payment for six consecutive months, despite KRA’s debt recovery efforts. However, those with active payment plans or partial payments are exempt.
- TIMS/eTIMS Non-Compliant Traders: Those who fail to comply with the mandatory transition to the Tax Invoice Management System (TIMS or eTIMS), as required by the VAT (Electronic Tax Invoice) Regulations, 2020.
- Non-Filers: Taxpayers who haven’t filed any VAT returns for six months or more.
- Nil-Filers with Input Tax Claims: Traders who submit nil returns for extended periods but have their PINs used to claim input tax.
- Missing Traders: Entities involved in VAT fraud, such as claiming fictitious input tax or using fraudulent credit notes.
Why It Matters
The VAT Special Table serves both corrective and preventive functions. It deters fraud, helps clean up outdated VAT obligations, and safeguards compliant taxpayers by flagging risky suppliers. It also improves the integrity of the VAT system by ensuring PINs are not misused.
Consequences of Being Flagged
If your PIN is on the VAT Special Table, you’ll be blocked from filing VAT returns and a notice will appear on iTax. Input VAT claims made using your PIN will be blocked for your suppliers. However, penalties are handled administratively, and some exceptions—particularly for PRWPs—allow for relief if proper documentation is provided.
What to Do
If flagged, contact your nearest KRA Tax Service Office (TSO) immediately. Regularize your status by filing overdue returns, clearing outstanding payments, and transitioning to eTIMS. Always maintain proper documentation to support your transactions.
This measure by the Commissioner for Micro and Small Taxpayers is intended to encourage compliance while supporting genuine businesses to get back on track swiftly.
