The Kenya Revenue Authority will start using Internet-enabled electronic tax registers to track real-time data on traders’ daily sales. The new law was published by Treasury Cabinet Secretary Ukur Yatani as a measure to curb tax evasion.
Businesses will be required to install new electronic tax registers which are connected to KRA for monitoring. Electronic tax registers are a requirement for all businesses with an annual turnover of Sh 5 million.
The new system will enable KRA to receive sales and data from registered companies and companies on a daily basis. The move will boost revenue collections and curb tax evasion.
“A register shall be capable of integrating with the authority’s systems,” Mr Yatani said. “It shall be capable of transmitting to the authority’s system the tax invoice data and the end of day summary of the respective day’s data in the manner specified by the Commissioner.”
The current tax registers store sales data for 30 days before access by and scrutiny by KRA.
The new electronic tax registers are expected to seal tax loopholes which have seen KRA fall short of achieving its target year in year out. The situation has worsened even further with the advent of the coronavirus pandemic. KRA fell short of Sh40 billion in taxes in July and August.
In the new regulations, traders will be expected to seek KRA’s permission before performing any business on a new day. This means that improper or incorrect data captured from the previous data could get the traders logged out.
Once they integrate their systems with the parties involved, KRA will also receive real-time data on motor vehicle purchases, property deals and real estate investors seeking electricity meters. This will remove the need for third parties to supply the information.
All business are expected to install the new tax registers by September 2021.