The treasury has announced that The VAT Bill 2012 will be introduced next year after the general election. Speaking to the Daily Nation , Finance Minister, Njeru Githae said, “There are indications that the Bill will be pushed aside until after the next elections. Right now, the priority is on the county governments Bill and the Finance Bill 2012 that need to be passed to facilitate the devolution process.”

The Bill, which is part of the ongoing tax reforms in the country which aim at increasing revenues, seeks to reduce the period of lodging refund claims from 12 months to 3 months; thus refund claims shall be paid within 3 months. This will enable businesses to have optional investments hence increasing their profitability because their funds will not be held up for long periods. Under the current VAT Bill, refunds are deducted from the current period VAT hence reducing your tax liability.

The VAT 2012 bill also seeks to introduce an interest rate of 2% on any outstanding refunds, as opposed to the current VAT rules which do not give any interest on any outstanding refunds. Therefore the government will have to pay refunds on time, meaning that businesses will have their amounts released timely for further investments as working capital.

[Read: The VAT Bill 2012 Broken Down]