Anxiety as KRA’s sales check system goes live
Times Tower, Kenya Revenue Authority (KRA) head office in Nairobi.
What you need to know:
- Non-compliance will attract a fine not exceeding Sh1 million, or imprisonment for a term not exceeding three years, or to both.
- The taxman said the deadline for using non-internet-enabled tax machines lapsed on January 15, 2022.
The Kenya Revenue Authority (KRA) has closed the grace period for companies to comply with a new law that requires them to send real-time data on their daily sales via internet-enabled electronic tax registers.
Traders will now be required to seek the taxman’s nod to perform any other business the next day under the new system, meaning incorrect or incomplete data logged the previous day could lock them out.
Failure to comply with the regulations attracts a fine not exceeding Sh1 million, or imprisonment for a term not exceeding three years, or to both.
The taxman said the deadline for using non-internet-enabled tax machines lapsed on January 15, 2022, and announced a crackdown on dealers supplying the phased-out gadgets.
To beat tax cheats, the authority now requires that electronic tax registers (ETRs) be connected to its systems for monitoring daily sales.
The law requires all businesses with an annual turnover of at least Sh5 million to have ETRs. Under the new system, the KRA will receive sales and invoice data from all registered firms and traders daily in a fresh push to boost revenue collections and curb tax evasion.
Non-compliant ETRs
“Kenya Revenue Authority (KRA) wishes to remind suppliers of Electronic Tax Registers (ETRs) and VAT registered taxpayers that the supply of ETRs that are not compliant with the Value Added Tax (Electronic Tax Invoice) Regulations, 2020 was discontinued effective January 15, 2022, as per the Public Notice of November 23, 2021, on the “Requirements for Uptake of Electronic Tax Invoice,” it said.
“Any supplier of ETRs found supplying non-compliant ETRs shall be liable to penalties as prescribed in the law,” said the taxman.
The internet-enabled ETRs come with several unique features. For example, it captures the personal identification number (PIN) of the gadget’s buyer. The capture of the buyer’s PIN is however optional when generating an invoice and is only applicable where the purchaser intends to claim input tax for the VAT paid.
The new ETRs also have a control unit serial number issued by KRA to identify each tax register beside a control unit invoice number which is a unique number generated by the tax register upon issuance of each tax invoice.
The gadgets also come with a Quick Response (QR) code which helps one to confirm the validity of the tax invoice.
