KRA WARNS TAXPAYERS AGAINST VAT FRAUD

KRA WARNS TAXPAYERS AGAINST VAT FRAUD

By Mercyline Omware

Traders who fail to make full and accurate

disclosure of all taxable transactions including

Value Added Tax (VAT) shall liable for

prosecution, Commissioner for Domestic Taxes

Ms. Elizabeth Meyo has warned.

The Commissioner said that Kenya Revenue

Authority (KRA) had recently noted an emerging

trend where VAT registered taxpayers are

reducing their tax liability through falsified input

VAT claims in contravention of the VAT Act,

2013 and the Tax Procedures Act.

The Commissioner said that this is a tax crime.

“Registered VAT taxpayers are notified that

falsified return declarations is a criminal

offence and shall not be tolerated”, said the

Commissioner.

To address this malpractice, KRA has put

structures in place to mitigate and investigate

the following VAT fraud incidences;

Utilization of fictitious invoices.

Claiming of input taxes from taxpayers not

registered for VAT.

Claiming of input taxes from taxpayers whose

PINs are not migrated to the KRA iTax system.

Claiming of input taxes by one or more

taxpayers using the same invoice details.

PIN theft and subsequent claiming of input

taxes from taxpayers one has not traded with.

Claiming of input taxes for amounts exceeding

those transacted.

Going forward, KRA shall commence a review of

input tax claims for various tax periods and will

take action against any fraudulent cases, which

will include disallowing and/or prosecution of

the affected invoice claims.