MGI Alekim LLP-vat auto assess

 VAA is a system-based solution that detects inconsistencies between purchase and sales invoices that have been declared in the VAT returns filed in i -Tax in accordance with Sec 29 of the Tax Procedures Act.

What gives rise to VAA inconsistency?

An inconsistency is raised when either of the following invoice details between the seller’s and buyer’s returns do not match:

  1. Invoice number
  2. Date of supply
  • Supplier/purchaser PIN
  1. Transaction amount

There are 2 indicators of an inconsistency:

  1. Under-declaration (denoted as ‘UD’ in the inconsistency report) – The seller has declared an amount lower than that declared by the corresponding buyer.
  2. Non-declaration (denoted as ‘ND’ in the inconsistency report) – The corresponding seller has not declared the sale in their VAT return

When the seller has not provided invoice details as prescribed in the VAT return but has captured sales made to VAT registered taxpayers as a lumped figure under the field ‘sales made to taxpayers not registered for VAT’, the system will register this as ND. This field, found in the last field of Sheet B in the VAT return is strictly used to capture sales made to the end consumer who is not registered for VAT. It should therefore not be used for sales made to VAT registered taxpayers who may end up claiming the amount as VAT input in their returns.

If the details are considered to be correct as per the declaration, the taxpayer should consult the corresponding buyer/seller and advise them to amend the return OR reach out to any of KRA’s support channels [Contact Centre, nearest Tax Service Office, Support Centre or Huduma Centre] for guidance.

How much time is someone given to correct the inconsistencies?

The notification on VAA will indicate the period issued to effect a return amendment. The adopted model provides two interim periods of 15 days each before disallowing input tax on outstanding inconsistent invoice declarations. This is however a configurable parameter that is guided by administrative policies and extensions, if any will be communicated through multiple channels including public notices.

Following the lapse of two defined periods, the system will generate a report on outstanding inconsistencies and disallow related input taxes. If any tax arises, as a result, the taxpayer should pay the tax.

We kindly advise taxpayers with VAT obligation to regularly check their ledgers and emails in case of any additional assessment.

If you find any assessment on your i-tax account feel free to contact us on: