Tags: Electric Tax Register, Tax invoice management system, ETRs,Fiscal POS terminal

The Kenya Revenue Authority (KRA) has rolled out the Electronic Tax Invoice requirements effective 1 August 2021with a period of 12 months. KRA have upgraded the current Electric Tax Register (ETR) regime to the Tax Invoice Management System (TIMS) that all Value Added Tax (VAT)-registered persons were required to comply with.

Since 2005, the implementation of non-TIMS compliant ETR have brought KRA  an initial increase of 16 per cent value-added tax (VAT) collection. But it was shortly eroded due to inherent technological shortfalls in the current ETR machines. Some of the shortfalls were due to tampering of the ETRs and mis-declaration or under declaration of sales transactions, pushing the KRA to streamline the smart Android pos system.

With TIMS, if you invoice someone, the information of your sale will go to iTax directly and the purchase of expense will go to the other party directly on their iTax account which is based on a prior registration for all VAT-registered taxpayers to the Tax Invoice Management System (TIMS). TIMS will facilitate electronic tax invoice management through standardization, validation, and transmission of invoices to KRA. The current ETR does not enable any data to be sent to iTa, but the new ETR is able to send all transaction data in real-time base or near real-time base to iTax at the touch of a button.

To produce a valid Electronic Tax Invoice including on the new ETR will need to have below factors:

· Buyer PIN (PIN of the purchaser): the capture of the buyer’s PIN is optional when generating an invoice and is only applicable where the purchaser intends to claim input tax for the VAT paid

· Control Unit serial number: a unique number issued by KRA to identify each tax register

· Control Unit invoice number: a unique number generated by the tax register upon issuance of each tax invoice

· Quick Response (QR) Code: to confirm the validity of the tax invoice

With the new ETRs working with TIMS, the tax evasion is easy to nab by the new system. The VAT tax-payer who fail to comply with the Regulations is an offense which will attract penalties as specified in Section 63 of the VAT Act, 2013, that is, a fine not exceeding Ksh1 million, or imprisonment for a term not exceeding three years, or to both.