KRA Collects over KSh 32 Billion in VAT Revenue by End of May 2025
- Kenya Revenue Authority (KRA) posted a 16% increase in Value Added Tax (VAT) collection by the end of May 2025
- KRA attributed the growth in VAT collection to a range of measures undertaken to enhance tax collection and curb fraud
- The taxman suspended online VAT registration, citing cases of fraudulent claims from traders, which have seen it lose billions of shillings in revenue
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Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.
Kenya Revenue Authority (KRA) has registered a 16% growth in May 2025 VAT collection.
Source: UGC
The authority netted KSh 32.141 billion in VAT by the end of May, compared to the previous month.
How KRA VAT collection performed by May
According to KRA, the Large and Medium Taxpayers (LMT) Department posted a 13% growth in VAT and surpassed the target by over KSh 1 billion.
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For the Micro and Small Taxpayers (MST) Department, the taxman registered a 24% growth, surpassing the collection target by KSh 110 million.
KRA attributed the growth in VAT collection to a wide range of measures undertaken to enhance compliance and end tax cheats and fraud.
The authority revealed that only 22% of registered taxpayers pay VAT, a move that prompted ongoing measures to improve collection.
Which KRA measures raised VAT collection?
According to a correspondence seen by TUKO.co.ke, these measures include:
- Deregistration of 20,981 inactive taxpayers to clean the register.
- Disruption of fraudulent chains: Where 7,719 suspected Missing Trader scheme enablers have been placed on the Special Table, restricting input tax claims.
- Establishment of a multi-departmental VAT Task Force to further investigate the schemes and recommend corrective actions.
- Ensuring in-person registration of VAT after a compulsory physical interview at a KRA office and approval by the vetting team, ensuring applicants and agents are physically verified.
- Revised documentary requirements: VAT applicants may need comprehensive documentation to confirm business legitimacy and traceability. These documents include county licenses, business permits, agent appointments, and proof of physical or online operations.
- Automated system checks and third-party document authentication to reduce manual verification.
- Scrutinising high-risk sectors and newly registered or inactive PINs
- Conducting planned physical site visits to business premises within the first year of VAT obligation addition, prioritised by risk indicators.
Why KRA suspended online VAT registration
KRA suspended online VAT registration, citing cases of fraudulent claims from traders, which have seen it lose billions of shillings in revenue.
The authority said thousands of traders have been presenting fictitious VAT claims, which cost it about KSh 2.5 billion per month.
KRA directed all VAT taxpayers to visit its offices and present proof of identity while registering for VAT, terming the exercise as a ‘know-your-customer' strategy.
What to know about VAT
- The National Treasury and Economic Planning proposed measures in the Finance Bill 2025 aimed at moving some goods from zero-rated to tax-exempt and reducing VAT refunds.
- Treasury Cabinet Secretary John Mbadi said that VAT refunds take about KSh 320 billion or 65% of tax refunds per year.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
