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CASE STUDY · TAX REGISTRATION
Back on the Books: KRA VAT and PAYE Registration for a Fast-Growing Nairobi Construction SME
A fast-growing Nairobi construction subcontractor needed VAT and PAYE registration before a main contractor would award a significant subcontract. Previous self-attempts on iTax had introduced errors that blocked the registrations. FIRM corrected the iTax profile and completed both registrations in 5 days.
Industry
Construction
Service
Tax Registration
Timeline
5 Business Days
Location
Nairobi, Kenya
THE CLIENT
About the Client
The client is the director of a fast-growing construction subcontracting business operating in Nairobi. The company had secured a strong pipeline of subcontract work and had recently been shortlisted by a main contractor for a significant project. The business had a KRA PIN but had not yet completed VAT or PAYE registration through the KRA iTax system.
The director had made previous attempts to complete the registrations through iTax without professional assistance. Those attempts had introduced errors into the company’s KRA profile that left the registrations incomplete and the account in an inconsistent state.
THE CHALLENGE
The Situation
The main contractor had made VAT registration a condition of awarding the subcontract. Without a VAT registration certificate, the subcontracting company could not issue valid tax invoices, which meant the main contractor could not reclaim input VAT on payments made to them. The deadline for providing proof of VAT registration was fixed and tied directly to the contract award timeline.
The errors in the iTax profile introduced by the earlier failed registration attempts meant that simply completing a new registration was not possible without first correcting the underlying account issues. The director did not have the technical familiarity with the KRA iTax system to identify and fix the errors independently.
FIRM needed to diagnose the iTax profile errors, engage with the Kenya Revenue Authority to resolve them, and then complete both the VAT and PAYE registrations within the contract deadline.
“We had tried to do it ourselves and ended up with a KRA profile full of errors we could not fix. The contract was on the line.”
HOW FIRM SOLVED IT
The Approach
01
iTax Profile Review and Error Correction
FIRM reviewed the company’s existing iTax profile and identified the specific filing errors that were preventing the registration process from proceeding. FIRM engaged with the Kenya Revenue Authority to correct the profile issues and restore the company’s KRA account to a clean status that would allow the registration applications to be submitted and processed.
02
VAT Registration
With the iTax profile corrected, FIRM completed the VAT registration for the company with the Kenya Revenue Authority. FIRM also briefed the director on the company’s VAT obligations under Kenyan tax law, including the applicable rate, the monthly filing cycle for VAT returns, and the requirements for issuing compliant tax invoices to clients.
03
PAYE Registration and Employer Obligations Briefing
FIRM completed the PAYE registration and provided the management team with a structured briefing on their employer tax obligations, including the calculation and monthly remittance of PAYE deductions, applicable rates for the company’s employee salary bands, and the penalties applicable under the Tax Procedures Act 2015 for late payment or non-filing.
THE RESULTS
What the Engagement Delivered
5
Business Days to Registered
iTax profile corrected, VAT registration completed, and PAYE registration finalised within five business days of FIRM’s instruction.
✓
Subcontract Secured
With VAT registration in place and the certificate issued, the company met the main contractor’s condition and the subcontract was awarded.
✓
Full KRA Compliance Active
VAT and PAYE registrations confirmed by the KRA, with the management team briefed on ongoing obligations, filing deadlines, and remittance requirements.
WHERE THEY ARE NOW
Outcome
With VAT and PAYE registration completed and the certificate issued, the company was able to meet the main contractor’s requirement and the subcontract proceeded. The business could now issue compliant tax invoices and began managing its employer payroll obligations under the PAYE framework.
FIRM continues to support the company’s tax compliance and provides advisory support as the business takes on larger contracts and its obligations under Kenyan tax law become more complex.
“We had tried the iTax registration ourselves and ended up with errors we could not fix. FIRM sorted the KRA issues and got both registrations done in five days. The contract came through.”
Director, Nairobi Construction SME