Kenyan businesses have one month to switch to the upgraded electronic tax registers. Failure to do so will attract a Sh1 million fine or a jail term not exceeding three years. The new internet enabled ETRs will grant the Kenya Revenue Authority real-time access to invoices.
“If a VAT registered taxpayer does not comply within the specified period then we invoke section 53 of the VAT Act which says that you will either be fined Sh1 million or three years imprisonment or both if you don’t comply within the specified timeline,” KRA’s chief manager in charge of Tax Invoice Management System (TIMS) Hakamba Wangwe said, according to the Business Daily.
All Kenyan manufacturers and traders will be expected to bear the cost to purchase and install the new ETR system which will be able to track invoicing of every transaction and accurately assess expected tax dues.
Read: KRA Officers to Use Body Cams to Crack Down on Tax Cheats
The new ETRs will be linked to KRA’s systems via the Internet, allowing it to monitor all transactions in the traders’ POS and invoicing systems. Traders will also be required to purchase software for the devices in addition to the upgraded ETR software.
“The idea is KRA is using technology to track sales on a real-time basis. So when someone makes a sale they will know and the buyers’ iTax page will also be updated,” tax expert and business partner at Kody Africa LLP, Nikhil Hira said.
KRA has authorized 16 suppliers to sell the new registers, saying there is enough supply to serve all businesses across the country. The suppliers have recorded booming business as businesses rush to beat the July 31 deadline.
Read also: KRA Airtime, Data Tax Collections Decline by Sh7.4 billion after Increment in Excise Duty
“We are selling from Sh45,000 to Sh120,000 for the ETRs and about Sh80,000 for the billing software,” said CEO of Wisepower Technologies, Charles Mwaura. His firm is among those approved to sell the gadget.
The new ETR will replace the current manual tax registers, which store sales data for 30 days before being analyzed by the KRA.
“The system seeks to enhance compliance. With the existing situation where we have most of the processes being manual, we don’t have visibility of Vatable transactions,” said Ms Wangwe
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874. You can also find us on Telegram through www.t.me/kahawatungu
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874
GIPHY App Key not set. Please check settings