KRA (Kenya Revenue Authority) has set a deadline of 1st January 2024 for all businesses to electronically generate and transmit their invoices to the taxman via eTIMS from 1st January 2024 according to the Finance Act 2023.
- According to KRA, all taxpayers doing business are required to onboard eTIMS. This provision includes taxpayers not registered for VAT but are registered for turnover tax, monthly rental income, partnerships, corporation tax, and individual income tax (including non-residents with a permanent establishment in Kenya.
- eTIMS is a software solution that provides technological convenience to meet taxpayers’ compliance needs. eTIMS will be accessed through various electronic devices including computers and mobile phone Apps, making it more convenient, user-friendly, and flexible for businesses to use.
- The objective of eTIMS is to reduce the cost of compliance for VAT-registered businesses. Through integration with eTIMS businesses will benefit from real time invoice transmission providing accuracy in tax invoice declarations and reconciliation between filed returns and payments.
Who should use eTIMS?
- VAT-registered taxpayers who are yet to be onboarded and are facing challenges integrating with TIMS ETR devices.
- Taxpayers dealing in bulk invoicing and facing capacity/performance issues with invoice transmission.
- VAT-registered taxpayers facing challenges integrating with TIMS ETR devices.
Onboarding on eTIMS
- One is required to download the eTIMS commitment form and fill it out appropriately before proceeding to the eTIMS portal.
- The VAT taxpayer signs up on the eTIMS portal & makes an application for the preferred software option. The taxpayer can only select one software option at any given time
- Authorized KRA officers will process the applications by conducting some due diligence through a KYT (Know Your Taxpayer) interview to determine the following:
- Nature of business (service industry or supplies goods or both)
- Frequency of invoicing
- If the taxpayer has access to a computing device – computer, laptop, tablet, smartphone
- If the taxpayer has access to the internet
The information provided above will determine the software option suitable for the taxpayer and facilitate the approval process.
The KRA officer schedules a date and time to install, configure, and train the taxpayer on how to use the eTIMS software for purposes of invoicing. The onboarding of taxpayers on eTIMS is being facilitated by KRA and not the ETR Suppliers
eTIMS System-to-System Integration
This solution is designed for taxpayers with an automated billing/ invoicing system who need to integrate their billing/ invoicing system with the Kenya Revenue Authority. The system-to-system integration is facilitated through an Online Sales Control Unit (OSCU) or Virtual Sales Control Unit (VSCU).
- Online Sales Control Unit (OSCU) is suitable for entities whose invoicing system operates online.
- Virtual Sales Control Unit (VSCU) is suitable for entities that undertake bulk invoicing and whose invoicing system does not always operate online.
- Taxpayers have the option to undertake self-integration or use a certified third-party vendor to facilitate the integration.
Persons intending to undertake self-integration or act as third-party vendors are required to undergo a certification process before the commencement of integration.