Auto-Populated VAT Returns – Are You Losing Money?

2 min read

Ruth Mwiti

June 24, 2025

Close up of woman holding pen while filling tax declaration

Introduction

Auto-populated VAT returns were introduced by the Kenya Revenue Authority (KRA) to simplify tax filing and reduce fraud. However, many businesses are now discovering that these automated reports may be causing them to lose money. At TAC Professional Services, we’ve observed how issues with auto-populated VAT returns are leading to lost input VAT claims and inaccurate sales reporting.

Auto-Populated VAT Returns – Real Case Example

Here’s a situation we recently encountered:

On 8th May 2025, a client’s purchase report showed Ksh 2 million in input VAT.
On 20th May, the same report reflected Ksh 3 million.

Same taxpayer. Same reporting period. Completely different figures. Since the system locks the return, any missing purchase entries can’t be added later — which means legitimate tax claims may simply vanish.

Output Errors and Misallocations

Sales reporting is also affected. Some taxpayers are seeing:

Sales they didn’t make included in their returns
Missing buyer PINs, even when entered correctly by suppliers

This results in:

Unclaimable input VAT
Overstated VAT payable
Broken buyer-supplier reconciliations
Higher audit risk

Consequences of Auto-Populated VAT Errors

The implications of auto-populated VAT returns include:

❌ Loss of legitimate input VAT
💸 Overpayment of VAT
🤔 Inaccurate compliance reporting
⚠️ Financial strain, especially for SMEs

How to Protect Your Business

Best Practices to Stay Compliant:

Pull eTIMS reports twice: mid-month and before the 20th
Keep internal purchase and sales records
Reconcile with suppliers and clients regularly
Confirm that buyer PINs are correctly captured
Report discrepancies early through iTax or KRA officers
Keep original supporting documentation for all transactions

Looking to build your internal capacity?
👉 Enroll in our VAT Compliance Essentials Course to understand how to navigate reporting tools, avoid costly errors, and ensure full compliance.

Why This Matters

Automation should enhance transparency, not create blind spots. Unfortunately, auto-populated VAT returns currently limit the taxpayer’s ability to correct or verify data, leading to potential losses.

At TAC Professional Services, we help clients overcome these challenges by providing: