The Kenya Revenue Authority has extended the transitioning of VAT-registered taxpayers from the old electronic tax registers to the Tax Invoice Management System (TIMs) for two months to September 30.
The extension follows a stakeholder meeting held by the Taxman General yesterday (1ST August). From the meeting, it also emerged that the compliance cost could not be claimed because the VAT (Electronic Tax Invoice) Regulation, 2020 could not provide details about the same.
Last month (July 2022), KRA alerted the public and all VAT-registered taxpayers they are required to transition to a new Tax Invoice Management System (TIMS), failure to which they risk a Sh1 million fine, or a jail term of three years.
Under the new system, the taxman will receive sales and invoice data from all registered firms and traders daily on its digital system, iTax.
The move aims to enhance VAT compliance, minimise fiscal fraud, and increase tax revenue per the VAT Regulations, 2020. KRA also expects to increase VAT collections to 35 per cent of total tax revenue through the new system.
Although the TIMS system has been launched, and some businesses have already moved to the new system, the Kenya Private Sector Alliance (KEPSA) has been engaging with the KRA on matters related to the cost of compliance and the sufficiency of duration for compliance.
Read also; KRA Looks to its New Tax System to Boost VAT Collection.
