The VAT special table: Kenya's hidden tax trap crushing businesses

VAT Special Table is punishing innocent businesses, especially SMEs, by denying them input VAT claims for dealing with suppliers flagged under this system.

Buried deep within the operations of the Kenya Revenue Authority (KRA) lies a little-known instrument with devastating consequences for businesses across the country-the VAT Special Table. For most ordinary taxpayers, it remains invisible. But for those who've fallen into its grip, it represents one of the most unfair and opaque mechanisms ever adopted in Kenya's tax enforcement system.

On the surface, the VAT Special Table was introduced as a tool to curb fraudulent VAT claims, particularly by identifying suppliers who issue fake invoices or fail to remit output VAT. But in practice, this tool is punishing innocent businesses, especially SMEs, by denying them input VAT claims for dealing with suppliers flagged under this system-even when such businesses have paid VAT in full, received proper invoices, filed returns correctly, and proof of payments for the supplies availed as per Sections 17(2) and Sections 17(3) of the VAT Act.