5th April, 2019
The Kenya Revenue Authority (KRA) has improved the Value Added Tax return verification module on iTax. The verification module is also referred to as VAT Automated Audit module (VAA). The improvement was driven by the need to enhance the customers’ experience following feedback that KRA received from various stakeholders regarding the module.
VAT Automated Audit (VAA) is a key enhancement of the iTax platform for VAT returns that detects inconsistencies between purchase and sales invoices that have been declared in the VAT returns filed on iTax. The system automatically generates a report of the inconsistences detected and sends a copy to both the buyer and the seller via their email accounts registered on iTax.
The inconsistences arise from instances where the return details entered by the buyer and the seller fail to match. These details include invoice numbers, date of supply, PIN of supplier or purchaser and the transaction amount. The taxpayers are required to resolve the inconsistences within a given time after receipt of the inconsistency report.
Besides addressing data inconsistences in the VAT returns, VAA is part of KRA’s data driven compliance initiatives which seeks to optimize use of data to enhance efficiency in tax compliance and tax processes. The ratio of matching invoice declaration will in the long-run form part of a risk profiling matrix that will determine the likelihood or frequency of a taxpayer’s audits, prompt processing of refunds, amongst others.
The VAA module has recently been enhanced to allow a wider range of characters in the VAT return fields. It also provides reasonable threshold for minimal variance in invoice amounts as well as increases the number of invoice line entries in the VAT return sheets from 50,000 to 75,000 entries. The latter, which is part of eight critical module improvements, will enable taxpayers with huge volumes of transactions to be able to equally declare all their invoice details in their returns.
Following the module improvements, KRA advises all taxpayers affected by the January 2018 return verification to amend their VAT tax returns within 60 days of issuance of the VAA public notice. KRA reminds taxpayers that input tax relating to inconsistencies which will remain unresolved after the stated period shall be rejected.
KRA further urges taxpayers who may encounter any challenges to seek KRA’s assistance through the contact centre, tax service offices, Huduma centres as well as service centres countrywide.
Commissioner, Domestic Taxes Department