KRA Commissioner General John Njiraini addresses a press conference. (Photo/ standardmedia.co.ke)The latest Kenya Revenue Authority guidelines are meant to ease the activities of suppliers countrywide. These guidelines favor the suppliers and enable them to enjoy exemptions from WHVAT (Withholding Value Added Tax). The treasury proposed for the implementation of this exemption in the 2017 Finace Act.
According to KRA, suppliers who have been supplying in a continuous flow for more than 24 months are eligible for applying for the exempt from the tax. This is to satisfy the exemption, as stated in section 42A of the Tax Procedures Act.
“Any Kenyan suppliers who can demonstrate that they have been in a continuous credit position for a period of not less than 24 months and also prior to that is invited to apply for the exemption." read the Kenya Revenue Authority guidelines.
However, in order to be qualified for the application, a supplier has to go through verification under a commissiner whose conclusion is crucial in guaranteeing the exemption.
“The commissioner shall then evaluate the reasons thereof, and confirm that they meet the conditions for exemption and communicate his decision to the supplier. Where the commissioner approves the application, an exemption letter will be issued to the supplier." the guidelines stated.
John Njiraini, who is the commissioner general, has the right and authority to nullify the exemption on grounds of false information, and any evasion of the tax in the specified period.
“Also where the supplier ceases to be in a credit position upon expiry of the first 24 months from the date of exemption, the supplier shall inform the commissioner immediately,” read the guidelines in a continuation.
This exemptions are meant to favour both the small-scale and large-scale suppliersand as a result to grow their businesses.