President William Ruto on Wednesday announced new measures aimed at enhancing accountability in the use of public resources, specifically addressing the opaque process of VAT refunds. Speaking at State House, the President revealed that the government would undertake significant reforms to ensure transparency and accountability in this area.
“About Ksh400 billion is spent on tax expenditure every year, especially on VAT refunds, a process that is largely opaque, and with limited accountability,” President Ruto stated. He emphasized the need for a clear and transparent process, noting that the current system lacks adequate oversight.
President Ruto committed to working with Parliament to establish a legislative and regulatory framework within the next 90 days. “I will be working with Parliament to provide a legislative and regulatory framework to make this process transparent, open, and accountable, with a view to reducing this huge public expenditure and directing savings to productive areas of the economy,” he announced.
VAT refunds are typically issued to companies dealing with zero-rated products or for tax withheld during the supply of goods. The Kenya Revenue Authority (KRA) explained that these refunds are applicable to registered VAT taxpayers dealing with taxable supplies listed under the second schedule of the VAT Act. Claims must be made within 12 months from the date of the supplies, and refunds arise from tax withheld by appointed tax withholding agents, with claims lodged within 24 months from the date the tax becomes due and payable.
Additionally, President Ruto emphasized the importance of boosting the local economy by focusing on local production and reducing the importation of goods. He reiterated that the newly nominated Cabinet would prioritize enhancing the local production of goods as a key economic strategy.
President William Ruto was seen filing his taxes at the KRA offices on May 26, 2023, underscoring his commitment to accountability and transparency in tax processes.
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