Discontinuation of the Value Added Tax (VAT) Special Table by the Kenya Revenue Authority (KRA)
KRA Update on Discontinuation of VAT Special Table.
There is an internal KRA memo dated 10 March 2026 (the KRA Memo) currently in circulation indicating that the VAT special table has been discontinued with immediate effect.
This is a major relief for various taxpayers who were either targeted under the special table or those that were dealing with taxpayers placed under the special table for the reasons outlined below.
What is the VAT special table?
The VAT special table is an administrative control within iTax that KRA introduced in June 2023 to enhance VAT compliance, prevent fraud, and protect honest traders. VAT-registered taxpayers placed on the special table included taxpayers filing payment returns without payment, those that had not transitioned to the Tax Invoice Management System (TIMS) or electronic Tax Invoice Management System (eTIMS), taxpayers who were not filing VAT returns despite being registered, those perpetually filing nil returns, and missing traders.
In practice, placement on the VAT special table restricted a taxpayer from filing VAT returns and prevented customers from claiming VAT when dealing with that supplier.
What has changed?
The KRA Memo indicates that the special table has now been discontinued with immediate effect, except for taxpayers involved in missing trader schemes, whether as beneficiaries or facilitators, as well as taxpayers involved in tax fraud. It further directs that taxpayers previously placed on the special table for reasons other than missing trader activity or tax fraud are to be removed unconditionally, with the exercise to be completed by 12 March 2026.
The importance of the missing trader exception is underscored by the decision in Commissioner of Domestic Taxes v Dinesh Construction Limited [2025] KEHC 17058 (KLR), where the High Court clarified that once KRA raises credible concerns through an audit or forensic review, the issue is no longer whether a taxpayer merely holds an invoice, but whether the taxpayer can prove that the supply genuinely took place. In practical terms, this means that the taxpayer must be able to demonstrate that the underlying transaction was real using business records that support the supply in substance, and that input VAT may only be claimed where there was a real and valid taxable supply. The focus is therefore on the commercial reality of the transaction rather than merely the existence of tax invoices.
Practical steps
In light of the above, if a taxpayer was placed on the special table for general compliance issues, there is now a strong basis to seek immediate removal. In addition, taxpayers with penalties arising from non-filing of VAT returns may apply for a waiver of those penalties. Lastly, taxpayers who were prevented from claiming input VAT for dealing with taxpayers under the special table can now claim the input VAT in their VAT returns.
Got more questions about eTIMS Compliance? Contact us at info@namiri.tech/ 011268536
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