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The Kenya Revenue Authority (KRA) has been involved in a significant development regarding Value Added Tax (VAT) on repossessed collateral sales.

KRA Exempts SACCOs and Banks from VAT on Repossessed Collateral Sales

Recently, the KRA has exempted Savings and Credit Co-operative Societies (SACCOs) and banks from paying VAT on the sale of repossessed collateral ⁷. This decision follows a protracted dispute between lenders and the KRA, where the tax authority had previously insisted on levying VAT on the disposal of repossessed assets ⁷.

This exemption is a notable change that will likely impact financial institutions in Kenya, potentially easing the financial burden associated with the recovery and sale of collateralized assets. The move is a result of the Finance Act 2026 ⁷.