Amanze Chinonye
Kenyan businesses will have to wait three years before applying for a value-added tax refund on qualifying unpaid debts, up from two years, under changes introduced by the Finance Act 2026, the Kenya Revenue Authority (KRA) said.
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The revised rule applies where a registered business has made a taxable supply, accounted for and paid VAT but has not received payment from the customer. KRA’s guidance allows a refund claim after three years but no later than four years from the date of the supply, subject to required documentation and other conditions.
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Most amendments under the Finance Act took effect on July 1, while a new import-documentation requirement began on Sept. 1. From Jan. 1, 2027, individual taxpayers will also face a revised income-tax filing deadline, with returns due by the last day of the fourth month after the end of the year of income.
The new deadline means income-tax returns will be due by April 30 each year. Returns for the 2026 year of income will therefore be due by April 30, 2027.
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The Act also changes the VAT treatment of some digital payment services and labour outsourcing arrangements, while raising to $2,000 the threshold for qualifying goods brought into Kenya by returning residents without VAT. KRA has urged taxpayers to review their tax treatment, filing schedules and supporting records in response to the changes.
The revised bad-debt provision means businesses that have already paid VAT on invoices that remain unpaid will have to wait an additional year before they can seek relief, extending the period during which the tax remains tied up while they pursue payment from customers.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
