It should be observed that the Withholding VAT (WHVAT) was first introduced in Kenya in 2003 but suspended in 2011. It was however reintroduced by the Finance Act 2014 as a measure to increase compliance and collect VAT revenue in advance.

Section 26 of Finance Act 2014 amended the VAT Act 2013 by introducing a new Section 25A. This new provision obligated government ministries, departments and agencies to withhold 6% of the tax payable thereon effective 19th September 2014 when making payments to suppliers for taxable supplies, with the exemption of payments made on supplies to official aid funded projects.