Electronically Tax Management System (eTIMS) is a system recently acquired by Kenya Revenue Authority (KRA) to manage invoices. From 2024, the parliament enacted a law requiring all businesses to register for eTIMS even if they are not operational.
The VAT Act of 2013 and the VAT (Electronic Tax Invoice) Regulations, 2020 provide the legal basis. The act was the onset of such actions by KRA to manage all invoices.
What it now means in a simple language is that KRA wants to see every single transactions you meant. KRA wants to see that how much you spent on eg office transpot including how much you paid that boda boda guy for delivering lunch to you, or for delivering a small parcel to an office across the streets.
Using the formal way will mean you prefer to use mainstream cabs, and while that will increase the cost of doing business, the informal sector is going to suffer the biggest blow. This is because, I'm sure a 65 years old boda boda guy who does not have a smartphone, trust me will not understand how etims work and to efficiently use it if you ask me.
According to KRA website, "Only VAT registered taxpayers are required by law to use a tax register as per the VAT Act (2013) and the VAT (ETI) Regulations (2020), " This means that the boda boda guy will not register for eTIMS and eventually will lose business from VAT registered companies.
On the pro-side, tax avoidants will be caught. There will also be a lot more transparency with how KRA calculates and collects VAT with transparency.
Note that you can apply for VAT online on your itax portal. To apply, please log into your iTax
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