This archive report was first published on 11 July 2019.
On July 11, 2019, the Kenya Revenue Authority (KRA) released Sh14.2 billion in tax refunds to numerous companies in the country, providing a much-needed cash boost to the private sector.
According to the Kenya Private Sector Alliance (Kepsa), the disbursement of refunds will help boost cash flow and spur activity in the private sector. Kepsa has been lobbying for the payments, citing the importance of timely refunds in supporting business growth.
"The KRA has confirmed that tax refund payments amounting to Sh14.2 billion were paid out between July 2018 to June 2019, with Sh11.1 billion paid out in the last quarter of the Financial Year 2018/2019," said Kepsa chief executive Carole Kariuki.
She expressed optimism that the balance from the whopping Sh56.9 billion pending for the past five years would soon be cleared, giving Kenyan businesses a much-needed impetus for expansions, factory upgrades, and new hirings.
"Refunds owed to manufacturers amount to Sh20 billion, which if paid would spark an annual growth of Sh50 billion in turnover, giving treasury Sh6 billion in VAT collections, Sh1 billion in corporate and income taxes, as well as create 20,000 indirect jobs," she said.
Companies have in the past lamented over cash flow challenges, citing delayed tax refunds as a major obstacle to business growth. The delayed disbursement of refunds has forced companies to take costly bank loans to fund operations, leading to high input costs that were eventually transferred to consumers.
