The Kenya Revenue Authority will not extend the July 31 deadline for transitioning from the old Electronic Tax Registers (ETRs) to the upgraded ETRs.
This leaves traders with two days to have migrated to the new system or they face closure of business.
Manufacturers and traders in the country are expected to migrate to a new Tax Invoice Management System (TIMS), failure to which they risk a Sh1 million fine, or a jail term of three years.
VAT (Electronic Tax Invoice) Regulations, 2020 requires all businesses with an annual turnover of at least Sh5 million to have ETRs.
Under the new system, the taxman will be receiving sales and invoice data from all registered firms and traders daily on its digital system, Tax.
The move is aimed at enhancing VAT compliance, minimizing fiscal fraud, and increasing tax revenue in accordance with the VAT Regulations, 2020.
KRA also expects to increase VAT collections to 35 per cent of total tax revenue through the new system.
In 2021, Value Added Tax (VAT) collections amounted to Sh121.044billion against a target of Sh119.543billion.
“KRA appreciates taxpayers who have complied this far and those who are making efforts to comply. For those who are in the process of acquiring upgraded ETRs, the proof of compliance shall include evidence that they have placed an order and made payment to the approved ETR Supplier,” the taxman said in a statement.
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The list of ETR Suppliers is available on the KRA website, KRA notes that the Supplier shall issue the trader with a letter providing details on the order placed and payment thereof.
In addition, all VAT-registered taxpayers who have already acquired the upgraded ETR devices must finalise the process of activation and integration by August 31, 2022.
There has been concern over a shortage of the new Internet-enabled ETRs, being supplied by KRA’s 16 approved suppliers.
A section of traders has also been calling for an extension, with the transition also said to be coming with an extra cost.
