Key Summary:
- The VAT Special Table is a mechanism implemented by KRA within iTax to identify taxpayers with suspicious VAT behaviour
- Businesses captured in this list are essentially suspended as they are unable to perform core business functions like issuing VAT-compliant invoices until they’re delisted.
- The top reasons that KRA cites for listing businesses in the Special Table are non-payment of VAT after filing, non-compliance with TIMS/eTIMS, non-filing of VAT returns, nil filing with input tax filed against the taxpayer, missing traders, and identification of fraudulent activity during a KRA audit.
- The ramifications of being listed on the VAT Special Table are the inability to file returns, loss of invoice credibility (other taxpayers are unable to claim VAT from your invoices), and penalties.
- For removal from the Special Table, taxpayers need to contact their Tax Service Officer for guidance.
In Kenya, a VAT-registered business is instantly part of a compliance ecosystem – and a potential target for fraud. With over 12% of KRA’s collection in the 2024/25 tax year attributable to domestic VAT, it is one of KRA’s biggest revenue lines. This scale explains why KRA watches VAT behaviour more closely than almost any other tax.
In a May 2025 KRA disclosure, it was revealed that only 22% of VAT-registered taxpayers are actually shouldering the tax burden, while the remaining 78% are credit filers or nil/zero filers. This massive compliance gap is costing the economy billions and has triggered a dramatic enforcement response from KRA.
Enter the VAT Special Table.
What is the VAT Special Table?
This isn’t a penalty box; it’s a digital compliance choke-point.
In simple terms, being on this list is like having your KRA PIN placed under arrest. You can’t perform core functions like issuing valid VAT invoices, and your customers lose their input tax claim, making your invoices commercially radioactive. You stop being a partner and start being a liability.
In the same May 2025 KRA update, 7,719 suspected “Missing Trader” scheme enablers were placed on this list in a single period, disrupting entire supply chains. For businesses that rely on smooth operations, a sudden listing can halt sales, destroy supplier trust, and cripple cash flow.
In this article, we’ll delve into the Special Table in plain language: what it is, why it exists, how it impacts your business operations, how to stay off it, and how to get removed should you end up in that unfortunate situation. No accounting jargon, just the practical insight you need to stay compliant and protect your business reputation.
Why does the VAT Special Table exist?
KRA created the Special Table for several reasons, some of which exist to protect themselves, and others for the taxpayers’ benefit:
- Reduce/prevent VAT leakages from non-compliant taxpayers
- Prevent underdeclaration of VAT
- Address delayed VAT remittances
- Prevent abuse of taxpayers’ PINs by non-compliant traders
- Enables taxpayers to conduct business with VAT-compliant taxpayers
How does a business end up on the VAT Special Table?
Most management teams only hear about the VAT Special Table when a supplier, customer, or the finance team says, “KRA has placed us on the Special Table.”
The key thing to know is this: listing in the Special Table usually happens when KRA’s systems or an audit flags your VAT position as higher risk. It’s essentially KRA saying, “We need tighter control around the VAT linked to this PIN.”
Here are the most common reasons:
- You’ve been identified as Payment Returns without Payments (PRWPs):
If returns are being submitted but payments aren’t coming through – and KRA’s debt collection efforts haven’t resolved it, or the business can’t be traced – your PIN may be flagged.
Note: businesses on formal payment plans or making partial payments are typically treated differently.
2. You keep filing nil returns while other taxpayers claim VAT using your invoices:
This mismatch is a major red flag: if others are claiming input VAT against your PIN, but you report nil activity for six months or more, KRA sees a credibility gap.
This doesn’t apply where you file nil returns and no one is claiming input VAT against you.
3. You’ve been flagged as a “missing trader”:
This is another serious issue. If KRA finds signs of VAT fraud like fictitious input VAT claims or fake credit notes used to reduce VAT your PIN can be placed under stricter control through the Special Table.
4. You haven’t transitioned to TIMS/eTIMS:
Failure to migrate from ETR to TIMS/eTIMS can trigger scrutiny because it undermines invoice integrity and makes VAT harder to validate.
5. You haven’t filed returns for 6+ months:
Even if business has been slow, not filing is interpreted as non-compliance. From KRA’s view, no return equals no visibility.
What happens once you’re on the Special Table list?
If you’re flagged, either as an owner, or you discover a company in your portfolio is affected, you can expect a few very practical consequences:
- VAT filing can be blocked until KRA clears the status. You may find the system won’t allow you to proceed normally.
- Your customers can’t claim VAT using your invoices. Their VAT claim may be rejected because your PIN fails validation.
- Your invoices lose commercial value. Even if you’ve done legitimate work, buyers become hesitant because the paperwork can’t support their VAT position.
- Resolution becomes manual. This is no “click and fix” issue on iTax; you typically need direct engagement with KRA for review and reinstatement.
Getting listed on the Special Table is not necessarily a full business shutdown, but it’s a serious red-tape event that can stall sales, strain relationships, and disrupt cash flow.
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Why should investors care if a business is listed in the Special Table?
For investors, this isn’t “just tax admin.” It’s a due diligence item because:
- It affects credibility and revenue: If a business can’t issue usable VAT invoices, customers may delay funding or walk away.
- It often signals cash-flow or reporting discipline problems: Irregular filing/payment patterns usually point to deeper operational strain.
- It can slow government or large-institution deals: Many buyers will not proceed if VAT compliance checks fail.
- It increases the likelihood of audits, disputes, and penalties.
In other words: it’s more than a tax problem. It’s a trust and continuity problem.
How do you stay off the VAT Special Table?
Here’s a simple prevention checklist that you can adapt within your business to prevent listing:
- File VAT returns on time every month, even if nil
- Pay what you can, and engage KRA early for a payment plan if you can’t
- Adopt and actively use TIMS/eTIMS
- Keep invoices clean and verifiable: correct PINs, dates, values, and supporting documents.
- Suspend or avoid conducting business with flagged taxpayers
How do you get off the VAT Special Table?
For businesses placed on the VAT Special Table, the good news is: this isn’t permanent. There’s usually a clear path back – provided you can demonstrate compliance and genuine trading activity.
What are the steps to getting delisted from the Special Table?
KRA generally follows a structured reactivation process:
- You’ll be given a checklist of documents to support VAT reactivation and removal from the Special Table.
- KRA reviews and verifies the documents, then
- An in-person interview at KRA offices is commonly conducted. This isn’t meant to intimidate – it’s KRA’s way of confirming you’re a real operating business and that your VAT position makes sense.
- If satisfied, KRA approves VAT reactivation, which effectively means you’re removed from the Special Table.
What kind of evidence does KRA want to see?
For reactivation, documentation usually needs to prove two things:
- You are dealing in vatable goods or services (i.e., you have legitimate taxable supplies), and
- You intend to continue dealing in vatable supplies going forward (i.e., the business is active and not a temporary shell).
Practically, this means you should be ready with records that support real operations: sales activity, contracts, invoices, delivery notes, bank statements, business permits, and any supporting VAT return/payment history.
Are there penalties involved?
Where a business has been placed on the Special Table due to non-filing, penalties may already have been triggered. In many cases, resolving the situation requires direct engagement with your Tax Service Office (TSO) so you can get guidance on how KRA will treat those penalties during reactivation.
Who should you talk to?
Because this process is handled largely outside “self-service” online workflows, businesses on the Special Table typically need to:
- Contact their TSO for step-by-step guidance, and
- Work with a Kenyan tax expert to prepare the documents, reconcile filings, and manage the reactivation meeting efficiently.
Has the VAT Special Table been tested in Kenyan courts?
Yes — but not in the way many people assume.
Kenyan courts have not issued a blanket ruling declaring the VAT Special Table unlawful or invalid. Instead, judicial scrutiny has focused on how KRA applies the Special Table, particularly whether the Authority follows due process and fair administrative action when restricting a taxpayer’s VAT rights.
In short: the tool itself has survived scrutiny, but its application must be fair.
What have the courts consistently emphasised?
Across High Court and Tax Appeals Tribunal (TAT) decisions, a few clear themes emerge.
Procedural fairness matters.
While courts recognise KRA’s statutory mandate to combat VAT fraud, they have been firm that enforcement must comply with principles of natural justice.
In practice, this means taxpayers should be notified of KRA’s intention to place them on the Special Table and be given a reasonable opportunity to respond, explain, and submit supporting documentation before adverse administrative action is finalised.
Where this process is skipped or handled arbitrarily, KRA’s action becomes vulnerable to challenge.
Can a business challenge being listed?
Yes. Businesses that believe they were unfairly listed — or denied a chance to be heard — can challenge the decision through the Tax Appeals Tribunal (TAT) or judicial review proceedings in the High Court.
That said, courts generally expect taxpayers to first engage KRA administratively and attempt resolution before escalating the dispute.
What the courts will not do
The TAT has been clear on one important limitation: it cannot issue anticipatory or speculative orders.
In other words, a taxpayer cannot obtain an order stopping KRA from possibly placing them on the Special Table in the future. There must be a final administrative action such as an actual restriction or denial of VAT functionality before the matter becomes appealable.
Public interest challenges: a higher bar
In at least one notable case, Opiyo & 2 Others v Kenya Revenue Authority & 2 Others, the High Court declined to allow petitioners to withdraw a constitutional challenge against the VAT Special Table.
The court emphasised that tax policy disputes brought in the public interest go beyond individual taxpayers. Because such cases affect the broader tax system, they require full judicial consideration rather than private settlement or withdrawal.
This reinforces the point that VAT enforcement tools like the Special Table are seen as system-wide mechanisms, not isolated administrative quirks.
Need support navigating the VAT Special Table?
If your business is listed on the VAT Special Table (or you want to ensure it never gets there) working with the right tax advisor makes a huge difference.
Alphacap supports Kenyan businesses with practical, hands-on tax services, including VAT compliance reviews, TIMS/eTIMS implementation support, Special Table delisting engagements, and direct liaison with KRA and Tax Service Offices.
Rather than reactive fixes, Alphacap focuses on clean filings, defensible documentation, and proactive risk management, helping management protect cash flow, credibility, and continuity.
Whether you’re dealing with a live KRA issue or strengthening controls as part of due diligence, Alphacap provides the technical depth and local experience needed to resolve VAT matters efficiently and confidently.