The Treasury will release Sh1.4 billion in the course of next month to pay off pending tax refunds.
Cabinet Secretary Henry Rotich said this is the balance of the Sh7.09 billion that had been set aside for settlement of tax refunds as part of the measures aimed at encouraging tax payments.
“As I speak, more than 80 per cent of this amount has been paid out, with the balance expected to be released within November once the claims pending are verified,” he said last week during Taxpayers Day celebrations in Nairobi.
Mr Rotich added that the Sh1.4 is besides the monthly allocation of Sh1.24 billion that the Kenya Revenue Authority uses to settle VAT claims.
“In total, therefore, for this year, we shall disburse of Sh21.97 billion towards VAT refund settlements,” he said.
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The move is expected to significantly enhance the cash positions of many businesses. Some of the tax refunds have been outstanding for more than two financial years, and will be key in financing business activities.
“I want to assure you that we will continue to support our businesses so that they can compete globally,” the CS said.
Addressing the function, President Uhuru Kenyatta praised Kenyans for accepting the critical importance of domestic resource mobilisation as a key driver of the country’s development agenda.
He noted that tax collection has grown five-fold from about Sh200 million in 2002 to more than Sh1 trillion in the 2015-16 financial year.
“Indeed, we have been financing over 90 per cent of our Budget through our domestic resources,” he said.