Tax & Accounting Blog

Kenya Proposes VAT Reforms

Indirect Tax, ONESOURCE, Transaction Tax February 22, 2012

Kenya has proposed significant reforms to its current VAT law in order to simplify compliance and increase revenues. According to the Treasury, the current compliance rate stands at about 55 per cent due to distortion and tax leakages caused by exemptions and zero rating. “When the proposed Bill becomes law, we hope to achieve 80 to 90 per cent VAT compliance,” a spokesman said. Once the simplification measures are in place and compliance is increased Kenya hopes to be able to reduce the VAT rate.