The Kenya Revenue Authority (KRA) has issued clarification on including KRA pin, while making a self-order from the American food chain Kentucky Fried Chicken (KFC) in Kenya.
In a statement, the authority indicated that inputting a KRA pin was only necessary when one intended to claim VAT input from a purchase.
The statement followed uproar and questions from Kenyans after a user online shared a video of a step-by-step process of making an order from the KFC which included inputting the KRA pin.
Subsequently, the video was reshared several times online, staring up Kenyans who claimed that it was a way for the government to collect more tax from Kenyans.
“Please note that you are only required to provide your PIN details if you intend to claim a VAT input from the purchase,” said KRA.
Kenyans Respond to Video of KRA Pin Requirement on KFC Order
In the video, the user who recorded and first posted the video says that the self-service machine is meant to reduce waiting time at the establishment when there is a long queue.
Then, he explains the process highlighting the section that requires KRA pin entry. However, the machine allows a person to skip the section and proceed with making payment.
“KFC has a machine where you can self-order if the queue is long. So, when you finish when you are checking out, it asks you for your KRA pin, but you can skip and continue paying with M-PESA, but taxes are loading at KFC,” he said.
Although other users hit at KRA and the franchise for the move, they were quickly corrected by others who noted that the provision is usually there even for other purchases including in supermarkets.
“That only applies if you want to claim the VAT. Same as you give your pin for any purchases, even in supermarkets if you intend to claim the input VAT. Nothing strange for me,” Ouma Martin said.
“Input of KRA is optional. When the meal is being bought by a company, for example office lunch, and the company claims its VAT, they would normally input their KRA pin. This is standard practice,” Joel Oyuga added.
Also Read: KRA Collects Billions as Kenyans Rush to Avoid Paying Ksh209 B in Penalties
Why to Claim VAT
Value Added Tax (VAT) is a consumer tax on the supply and importation of taxable goods or services made in Kenya. It’s a tax that applies at every stage of the production and distribution chain, ultimately paid by the end consumer.
VAT works under the Input or Output Tax system.
“Input tax refers to a tax paid by a registered person on purchase of goods or services for the purpose of his business.
“Output tax refers to tax charged on the sales of taxable goods or services. Tax payable is the difference between the Output tax and the Input tax,’ KRA indicates.
Additionally, VAT is payable when goods or services are supplied to the purchaser, when an invoice is issued in respect of the supply, when Payment is received for all or part of the supply and when a certificate is issued by an architect, surveyor, or any person acting as a consultant or in a supervisory capacity regarding the service.
How to Claim VAT
One can claim a refund if they are registered as VAT taxpayers dealing with supplies and have made zero-rated supplies.
“Zero rating is applicable to certain categories of supplies meant for promotion of trade, Exports, Agriculture, Education and Health.
“Zero rating makes the supplies cheaper as no tax is chargeable while input tax can be claimed. Registered taxpayers who sell zero-rated supplies are entitled to a refund of input tax paid. This helps in furtherance of business,” KRA Explains on its website.
In addition, remember to claim within 12 months from the date of the supplies. When a contractor supplies goods or services to an appointed withholding VAT agent, and the agent withholds Tax at 2%, you can claim a refund of the excess Tax.
However, you must have certified copies of the original invoice, copies of all credit and debit notes issued in a chronological order, and Purchase Invoices.
Also, you will be required to produce copies of customs entries, receipts for the payment of customs duty or tax, credit and debit notes received filled chronologically, and details of the amount of tax charged on supply made or received.
