Last year for instance, the Kenya Revenue Authority KRA decreed that all taxpayers have to shift toward electronic invoicing through the Electronic Tax Management System (eTIMS). The first deadline for the integration into eTIMS was originally set for 01 . 09. 2023.
However, since a few taxpayers experienced integration and technical issues in this process, the KRA has provided an extended deadline up to 31 March 2024. However, it is important to point out that this grace period has been extended to non-VAT registered taxpayers only.
It is necessary to acknowledge the sources discussing the compliance and integration issues that have initiated the decision regarding the extension of the eTIMS deadlines.
Grace Period Provided until 31st March 2024
The Kenya Revenue Authority (KRA), through a public notice dated 27 December 2023, informed all non-VAT registered taxpayers that they could manually enlist their invoices on the eTIMS portal up to 31 March 2024.
From a previous release that was done during the middle of the year, taxpayers were to be penalised if they had not adopted electronic invoicing prior to the set date of 1 September 2023.
It is a comforting fact that due to the grace period offered by KRA until 31st of March 2024, non –VAT registered taxpayers do not have to worry about being asked for penalties for non –generation of e –invoices.
Whenever taxpayers complete their registration formalities and move to eTIMS before the set due date for the generation of such invoices, they should apply to embrace all the manual invoices (those issued after 01/01/2024) in the new eTIMS model of the KRA.
Compliance Requirements for Onboarding
Having understood that eTIMS integration now has extended deadlines for implementation, there are some compliance that have to be met before engaging in it.
Which of the stakeholders is obliged to migrate to the new eTIMS structure of the KRA?As per the law all persons in business whether registered or not registered for VAT should start issuing electronic invoices as per the timeline prescribed by the government. Who are these persons in business?
Persons in business can be any of the following:
- It can apply to any type of business including limited companies, partnership firms, sole traders, trusts, associations and many others.
- Individuals who have to pay income tax on any of the following
- Income tax from monthly rentals (MRI – Monthly Rental Tax).
Turnover tax (TOT)
- Income tax paid within the year – where it applies especially to corporations, partnership firms, and persons carrying on any business for profit, resident or non-resident.
- Individuals who generate income from business operations carried out in all sections including the formal and informal sectors.
People engaged in all forms of trading activities including those who are registered for VAT and those who are not. Certain types of businesses do not pay VAT including hospitals, medical services, education services, non-government organisations, tours & travels and many others. However, the above businesses should incorporate their current system into eTIMS within the set timelines as agreed.
