As of 1 January 2024, non-VAT-registered taxpayers in Kenya will be required to utilize the electronic Tax Invoice Management System (eTIMS) to create and send their invoices to the Kenya Revenue Authority (KRA). Failure to comply with this new regulation will lead to the disqualification of expenses for tax purposes. The KRA made this announcement through a public notice on 17 November 2023, notifying businesses of this upcoming obligation.
The implementation of eTIMS aims to streamline and digitize the invoicing process in Kenya. By transitioning from manual paper-based invoices to an electronic system, the KRA expects to enhance efficiency, reduce errors, and improve tax compliance. This move aligns with global trends towards digitalization and automation of tax administration systems.
The eTIMS platform will enable taxpayers to generate and transmit invoices electronically, eliminating the need for physical paperwork. This will save businesses time and resources, as well as reduce the environmental impact associated with paper-based invoicing. Additionally, the electronic system will provide a more secure and transparent audit trail, making it easier for the KRA to verify transactions and detect any potential tax evasion.
To ensure a smooth transition, the KRA will provide training and support to taxpayers on how to use the eTIMS platform effectively. It is crucial for businesses to familiarize themselves with the system and understand the requirements to avoid any disruptions in their invoicing processes. The KRA has also set up a dedicated helpline and online resources to address any queries or concerns from taxpayers.
It is important to note that this new requirement only applies to non-VAT-registered taxpayers. VAT-registered businesses already use the KRA’s existing electronic invoicing system, known as the iTax platform. Therefore, if a business is already registered for VAT, they do not need to make any changes to their invoicing procedures.
The introduction of eTIMS is part of the KRA’s broader efforts to modernize and digitize tax administration in Kenya. In recent years, the authority has implemented various technological solutions to improve tax collection and compliance. These initiatives include the digitization of tax returns and payments, the use of electronic fiscal devices for recording sales, and the integration of taxpayer information systems.
By embracing digital technologies, the KRA aims to create a more efficient and transparent tax ecosystem. This will not only benefit the government in terms of increased revenue collection but also provide businesses with a more streamlined and convenient tax compliance process. Furthermore, the digitization of tax administration can help reduce corruption and improve accountability by minimizing human intervention and automating processes.
The eTIMS requirement is part of a global trend towards electronic invoicing and tax reporting. Many countries around the world have already implemented similar systems to modernize their tax administrations and combat tax evasion. By adopting eTIMS, Kenya is aligning itself with international best practices and joining the global community in the digital transformation of tax systems.
In conclusion, non-VAT-registered taxpayers in Kenya must prepare for the implementation of the electronic Tax Invoice Management System (eTIMS) from 1 January 2024. This new requirement aims to enhance efficiency, reduce errors, and improve tax compliance in the country. Businesses need to familiarize themselves with the eTIMS platform and ensure compliance to avoid any disruptions in their invoicing processes. The Kenya Revenue Authority (KRA) is committed to providing support and guidance to taxpayers during this transition. By embracing digital technologies, Kenya is taking a significant step towards modernizing its tax administration and aligning itself with global trends in electronic invoicing and tax reporting.