In a decisive move to clamp down on tax fraud, the Kenya Revenue Authority (KRA) has suspended the online registration of Value Added Tax (VAT) effective immediately. The tax agency announced the suspension on Monday, citing rising cases of fraudulent VAT claims and abuse of the digital registration platform.

According to KRA, the decision follows an internal audit and intelligence reports indicating that unscrupulous individuals have been exploiting the online VAT registration system to create fictitious taxpayer profiles. These profiles were then being used to generate false VAT claims, costing the government billions in lost revenue.

“KRA is committed to protecting the integrity of the tax system. We have temporarily suspended the online VAT registration to allow for the implementation of enhanced vetting measures aimed at curbing fraud,” read part of a statement issued by the authority.

While the suspension is expected to disrupt normal business operations, especially for startups and small enterprises seeking VAT registration, KRA has assured taxpayers that alternative manual application procedures are being rolled out at selected Huduma Centres and KRA regional offices.

“We acknowledge the inconvenience this may cause but urge the public to cooperate with us as we strengthen our systems. Our goal is to ensure that only genuine taxpayers are registered for VAT and that public funds are protected,” the statement added.

Tax experts have welcomed the move, albeit cautiously. “It’s a necessary step, but KRA must ensure the manual system is efficient and doesn’t create bottlenecks for legitimate businesses,” said Lydia Wanjiru, a tax consultant based in Nairobi.

The suspension comes amid a broader crackdown on tax evasion and fraudulent practices in Kenya’s revenue collection system. Last month, several companies were flagged for submitting fictitious VAT returns, triggering investigations by the Directorate of Criminal Investigations (DCI) and the KRA’s enforcement unit.

As the KRA works to fortify its digital infrastructure, it has also urged Kenyans to report any suspicious tax-related activity through its anonymous iWhistle platform.

KRA has not specified when online VAT registration will resume but indicated that a full system audit and overhaul is currently underway.

In the meantime, businesses seeking registration are advised to consult directly with KRA offices or visit the authority’s website for updated guidelines. Businesses and individuals who wish to file KRA returns manually can engage errands service compaanies to save on time and cost.