Proposed changes on VAT Act make it hard to claim input tax

The Finance Bill 2020 has proposed to amend Section 17 (2) of the VAT Act, 2013, to include a provision that requires taxpayers to claim input tax in their VAT returns on condition that providers of the taxable goods or services must have declared the corresponding sale in their VAT return. The proposal, if passed in its current form would, impose an unnecessary compliance burden to taxpayers and be impractical to implement for various reasons.

The requirement implies that it would be the responsibility of a taxpayer to confirm that a vendor has declared output tax prior to them claiming the same in their VAT return. This would be an unnecessary burden pushed to taxpayers.