KRA Extends New VAT Deadline to September

The Kenya Revenue Authority (KRA) has extended the deadline for the new tax invoicing system for businesses to 30^th September 2022.

The extension according to the taxman will offer businesses enough time to acquire and activate their Tax Invoice Management System (TIMS) devices in compliance with Electronic Tax Invoice (ETI) Regulations that were gazetted on 25th September 2020.

“Following a stakeholder meeting called by KRA commissioner general on August 1, TIMS compliance deadline has been extended to end of September,’’ the Kenya Private Sector Alliance (Kepsa) said in a statement.

KRA had set an earlier deadline of July 31, waning that traders would be risking a fine not exceeding 1 million shillings or 3 years in jail for noncompliance with the ETR directive.

The upgraded electronic tax registers (ETRs) will grant the taxman real-time access to invoices a move that will minimize VAT fraud. In a statement, KRA noted that taxpayers have been requesting more time to acquire the devices which will cost them between 45,000 and 120,000 shillings. On the other hand, the billing software is going for 80,000 shillings.

The machines will be connected through the internet to the KRA’s system giving the taxman access to the trader’s transactions.

“The idea for KRA is to use 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,” Nikhil Hira, a tax expert said.

The tax authority had earlier said that they are engaging with supplies to ensure the TIM Kits are highly available in the country. The authority has so far approved 16 suppliers.

The use of technology will ease the taxman’s effort to tame tax evasion which has led to massive tax losses. The authority is also planning to introduce the wearing of body cameras among its staff to curb tax cheating and enable the taxman to monitor staffs who receive bribes from taxpayers, resulting in tax evasion.

The authority revealed that it loses an estimated 12 billion shillings yearly from excise tax evasion alone. Through the use of technology, it is targeting to hit 6.8 trillion shillings tax by 2023.