According to the Kenya Revenue Authority (KRA), unclaimed tax refunds total more than Sh109 billion, which is hurting businesses’ cash flow. Tax refund claims increased by Sh3. 2 billion in the year ending in June 2021, up from Sh106. 7 billion the year before, prompting Auditor General Nancy Gathungu to raise a concern about the backlog.
The authority disclosed that although it had received over 2,000 requests for withholding VAT refunds, only 1,041 businesses had been approved, and Sh6.6 billion had been paid in refunds.
According to KRA, claims must be paid out within three months of the application date.
The changes will lessen the burden on taxpayers to pay back unpaid taxes in light of the economic effects of the coronavirus pandemic.