KRA Tightens VAT Compliance as Collections Hit KSh 32Bn — What This Means for Kenyan Businesses and How Janta Can Help

In May 2025, the Kenya Revenue Authority (KRA) recorded a notable 16% surge in Value Added Tax (VAT) collections, reaching KSh 32.141 billion. This milestone, while impressive from a fiscal standpoint, carries deep implications for businesses across the country—particularly in light of the KRA’s aggressive compliance drive. For companies navigating these shifting regulatory waters, having a reliable business services partner like Janta Kenya has never been more crucial.

VAT Collections Surge Amid Compliance Crackdown

KRA attributes the record-breaking revenue performance to a series of intensified compliance measures introduced in April. These measures included targeted enforcement activities, system audits, and data matching efforts that have closed long-standing loopholes commonly exploited for tax fraud. Notably, the Large and Medium Taxpayers (LMT) Department exceeded its target by over KSh 1 billion, while the Micro and Small Taxpayers (MST) Department surpassed theirs by KSh 110 million—a 24% increase.

However, these results also underscore a worrying imbalance. According to KRA, only 22% of VAT-registered taxpayers are currently contributing to the national VAT pool, while the rest are either filing credits (52%) or declaring nil/zero returns (26%).

The VAT Special Table: A Double-Edged Sword

To counteract VAT non-compliance, KRA introduced the VAT Special Table within the iTax system in 2022. This digital compliance enforcement tool now plays a pivotal role in deterring tax evasion and safeguarding legitimate businesses. Once a business is flagged and placed on the Special Table, other taxpayers are restricted from claiming input tax credits from that entity until it is cleared by the authority.

As of May 2025, KRA has:

• Identified 20,981 inactive taxpayers for deregistration,
• Flagged 7,719 suspected ‘Missing Trader’ enablers, and
• Initiated widespread restrictions to sever fraudulent VAT chains.

Why This Matters for Your Business

While these developments aim to create a fairer tax landscape, they can also pose significant operational risks for compliant businesses—especially those unknowingly transacting with non-compliant or deregistered suppliers.

This is where Janta Business Services steps in.

At Janta, we provide proactive support to businesses—ensuring that your enterprise:

• Remains compliant with KRA’s ever-evolving tax regulations,
• Conducts real-time due diligence on suppliers and partners to avoid penalties,
• Maintains accurate, audit-ready VAT filings, and
• Streamlines interactions with government systems like iTax and TIMS (Tax Invoice Management System).

Our tax advisory and compliance services are designed to give businesses peace of mind in an environment where regulatory enforcement is intensifying.

How Janta Helps You Stay Ahead

We understand that compliance isn’t just about meeting legal requirements—it’s also about maintaining your business reputation and avoiding disruptions that could affect your bottom line.

Here’s how Janta Kenya supports businesses under KRA’s enhanced compliance framework:

• ✅ Business Audit Readiness: We prepare your financial records for potential KRA reviews, minimizing risks of fines or investigations.
• ✅ Supplier Vetting: Through digital tools and manual checks, we help ensure your trading partners are tax-compliant and safe to transact with.
• ✅ VAT Filing and Reconciliation: Our specialists manage your monthly VAT filings, reconcile your books, and reduce exposure to compliance flags.
• ✅ System Training & Support: Need help navigating iTax, TIMS, or other digital systems? We provide hands-on training and continuous support for your teams.

Final Thoughts

KRA’s KSh 32 billion VAT collection milestone is a clear signal that Kenya’s tax enforcement environment is tightening. As the Authority continues to root out non-compliance through initiatives like the VAT Special Table, businesses must remain vigilant and proactive in protecting their interests.

Partnering with a seasoned business services firm like Janta Kenya ensures you’re not only compliant—but also positioned to grow, scale, and thrive even under stricter regulation.

Ready to strengthen your tax compliance strategy?
📞 Talk to Janta today and let us help your business stay ahead of the curve.