Kenya restores the three-year waiting period for VAT bad-debt refunds
This page records one dated change. For the rules in Kenya as they stand today, see the Kenya guide →
- Jurisdiction
- 🇰🇪 Kenya
- Tax
- VAT
- Change type
- Update
- Status
- In force
- Impact
- Action required
- Announced
- 23 June 2026
- Effective
- 1 July 2026
- Instrument
- KE-FINACT-19-2026
- Authority
- National Council for Law Reporting (Kenya Law)
- Systems
- Tax engine, ERP, Reporting
- Verified
- Corroborated against official id · medium confidence
Any VAT-registered person in Kenya claiming a refund of VAT on a bad debt.
Update VAT bad-debt relief workflows to require a three-year minimum qualifying period before claiming a refund on a bad debt in Kenya.
Tax engineERPReporting
Kenya’s Finance Act, 2026 amends section 31(1) of the VAT Act, CAP 476, reverting the minimum qualifying period for a VAT refund on bad debts from two years to three years, restoring the position that applied before the Finance Act 2025 introduced the two-year period.
What changed in detail
Kenya’s Finance Act, 2026 amends section 31(1) of the VAT Act, CAP 476, reverting the minimum qualifying period for a VAT refund on bad debts from two years to three years, with effect from 1 July 2026.
This restores the position that applied before the Finance Act 2025 introduced the two-year period.
What it means
This one runs the opposite way to the rest of the Finance Act’s VAT changes — it is a tightening, and it creates a transition problem rather than a forward-looking one. Relief claimed on the two-year basis between July 2025 and June 2026 sits under a rule that no longer exists, and any debt that became claimable at two years but has not yet been claimed now waits another twelve months. Both populations are worth identifying before the next return rather than after an audit.