VAT compliance in Kenya is not just a legal obligation—it’s a cornerstone of business credibility and operational transparency. The Kenya Revenue Authority (KRA) has increasingly tightened its systems to ensure that every VAT-registered entity adheres to its tax obligations. One such enforcement tool is the VAT Special Table, a register that monitors businesses that exhibit non-compliant behavior in their VAT filings or payments.
With KRA’s shift toward digital compliance through tools like eTIMS and iTax, businesses are expected to align with real-time filing and payment practices. Falling short of these expectations can land you in serious trouble, including ending up on the dreaded VAT Special Table.
What Is the VAT Special Table?
The VAT Special Table is a classified register maintained by KRA that lists VAT-registered businesses with compliance inconsistencies. It’s essentially a “watchlist” for entities that neglect their tax duties or engage in questionable practices that disrupt the VAT system.
The Purpose of the VAT Special Table: VAT compliance in Kenya
The Special Table serves several functions:
- Enhancing transparency in the VAT ecosystem.
- Identifying high-risk businesses that affect revenue collection.
- Restricting input VAT claims on the basis of supplier non-compliance.
Legal Basis Behind the Special Register
The legal foundation for the Special Table can be traced to the VAT Act, 2013 and KRA enforcement regulations. Under these laws, KRA is mandated to maintain integrity in the VAT system, which includes detecting and deterring abuse, fraud, or prolonged negligence.
Why You Might End Up on the VAT Special Table
Here are the 5 key triggers that could land your business on the Special Table:
1. PRWPs – Persistent Return Without Payment
If you’ve been filing your VAT returns but not paying for six or more months, you fall under PRWPs (Persistent Return Without Payment). This tells KRA that while you recognize your tax liability, you’re deliberately not meeting it.
2. TIMS/eTIMS Non-Compliance
Businesses are required to transition from ETR (Electronic Tax Register) to eTIMS (Electronic Tax Invoice Management System). Failure to adopt eTIMS flags your business as non-compliant, especially in issuing valid tax invoices.
3. Non-Filers: 6+ Months of Silence
If you’ve simply gone silent—no VAT returns filed in six or more months—KRA will place you on the Special Table for non-filing. This is a red flag that the business might be inactive, avoiding tax, or concealing fraud.
4. Nil Filers Making Claims
You cannot file nil returns and still go ahead and claim input VAT. That’s contradictory. KRA has flagged many businesses for claiming input tax without declaring any sales, and such activity raises suspicions of invoice manipulation.
5. Missing Traders & Suspected Fraud
If you’re linked to businesses flagged for fake invoices or VAT fraud, you could be listed as a Missing Trader. KRA uses data analytics to detect irregular invoice chains and will penalize any connected parties.
What Happens If You Are Listed?
Being listed comes with several consequences:
Filing Restrictions
You won’t be able to file your VAT returns through iTax until the issue is resolved. Your tax account essentially gets frozen for VAT. Contact us for VAT compliance in Kenya.
Penalties and Interest Charges
KRA imposes heavy penalties and interest charges for non-filing or under-declaration of VAT. These amounts accrue monthly, increasing your tax liability drastically.
Denial of Input VAT Claims
Once listed, you can’t claim input VAT, and your buyers also can’t claim input tax from purchases made from you. This affects your business competitiveness and cash flow.
How to Get Off the KRA VAT Special Table
Getting delisted requires that you prove compliance and provide supporting documentation.
Required Documentation
To get off the list, visit the nearest KRA Tax Office with the following:
- TIMS/eTIMS machine proof (e.g., installation receipt or system access logs)
- 12 months of bank statements
- Invoices or contracts supporting past transactions
- Business and director ID copies
- Updated email and phone contact info
Process at the KRA Tax Office
- Visit the tax office and explain your case.
- Submit all required documents.
- KRA will verify your compliance level.
- Upon approval, you’ll be delisted from the Special Table within a few days to weeks.
How Long Does Delisting Take?
If your documents are in order, it can take as little as 7 working days. However, more complex cases involving suspected fraud can take longer—up to 30 days or more.
How to Avoid Being Listed in the First Place
Proactive compliance is key.
Best Practices for VAT Return Filing
- Always file VAT returns on time, even when you have no transactions (nil return).
- Pay VAT promptly to avoid the PRWP tag.
Ensuring eTIMS Compliance
- Transition from ETR to eTIMS if you haven’t already.
- Ensure every invoice you issue is valid and electronically traceable.
Detecting and Avoiding Fraudulent Invoices
- Vet all your suppliers to ensure they are tax compliant.
- Avoid buying invoices or partnering with “Missing Traders.”
Impact of Being Listed on Business Operations
Legal Risks and Supplier Trust Issues
Once listed, you may:
- Lose business partners who can’t claim input VAT from you.
- Attract legal audits from KRA.
- Suffer reputational damage in the industry.
Challenges in Claiming Input VAT
KRA’s system blocks you from claiming VAT credits. This limits your financial flexibility and forces you to absorb VAT as a cost.
KRA’s Technology and Data Tracking Tools
Integration with eTIMS and iTax
KRA has built a fully integrated digital compliance system. eTIMS and iTax share real-time data, allowing automatic flagging of anomalies.
Real-Time Monitoring and Flagging
KRA uses AI and data analytics to:
- Cross-reference supplier and buyer VAT records.
- Monitor late filings and inconsistencies.
- Detect unregistered businesses issuing fake invoices.
Role of Tax Consultants in Navigating Compliance
When to Hire a Consultant
If you’re:
- Already listed,
- Have complex records, or
- Are unsure how to comply,
How They Help Remove Your Name From the List
Tax consultants:
- Prepare required documents professionally.
- Liaise with KRA on your behalf.
- Advise on system upgrades (e.g., eTIMS setup).
Success Stories: Businesses That Got Off the List
Many SMEs have successfully gotten off the VAT Special Table by:
- Rectifying filing gaps.
- Replacing fake invoices.
- Submitting missing bank records.
One Nairobi-based wholesaler was able to clear their name within 10 days by complying with all eTIMS requirements and submitting supporting invoices.
Frequently Asked Questions (FAQs)
1. Can I still operate my business if I’m listed?
Yes, but your VAT compliance privileges (like filing or claiming input VAT) are restricted.
2. How do I know if I’m on the VAT Special Table?
You’ll receive a notification via email or iTax, or you can check directly at the KRA office.
3. Can my buyers claim VAT if I’m listed?
No, your listing affects their ability to claim VAT on purchases from you.
4. Is delisting from the VAT Special Table automatic after compliance?
No, you must apply and provide evidence for KRA to delist you.
5. What happens if I ignore the listing?
Penalties will accumulate, and KRA may initiate legal recovery actions.
6. Do nil returns still need to be filed?
Yes. Filing nil returns is mandatory to avoid non-filer penalties.
Conclusion
Getting on the KRA VAT Special Table can seriously disrupt your business, but with timely action, accurate documentation, and strict compliance, you can avoid—or even reverse—this status. Be proactive with filing, transition to eTIMS, and consult professionals when needed. VAT Compliance in Kenya is easy.
Stay compliant. Stay profitable.