Filing your taxes with Kenya Revenue Authority (KRA), as a VAT-registered trader, will now be more effective and efficient with the introduction of the new system dubbed the Tax Invoice Management System (TIMS).
At full implementation, TIMS is expected to increase VAT compliance, reduce VAT fraud, and result in an overall increase in tax revenue for the betterment of our country.
But the most important thing now to note is that by coming on board TIMS, you will enjoy the benefit of simplified VAT return filing.
Here are key pointers you need to know about this game-changing system that simplifies tax compliance and allows you to focus on improving your business.
TIMS is the engine powering the electronic tax invoice. The generation of the electronic tax invoice is achieved using Electronic Tax Registers (ETRs) that integrate with trader systems and validate invoice data and transmit the same to KRA on a real-time basis.
Accuracy of VAT data
The system improves the accuracy of VAT data for transactional sales and purchase information, thus addressing the issue of invoice inconsistencies.
The transmission of invoice data requires internet connection, but don’t worry; in the event of internet disruption, the trader continues with their operations, since the validation of the invoice data does not require internet connection. Once the connectivity is restored, the invoices generated are automatically transmitted to KRA.
A key feature of the electronic tax invoice is the QR Code, which allows one to confirm the validity of a tax invoice. The details populated on scanning the QR code include the name of seller (VAT Taxpayer), invoice date, total invoice Amount, total taxable amount, and total VAT amount if applicable. This goes a long way in ensuring VAT is accounted for correctly since anyone can verify the invoice/receipt issued by the trader.
The compliant ETRs are activated automatically, thus there is no need for VAT taxpayers to bring their ETRs to the KRA offices for activation. In case of changes in the VAT rate, the ETRs are updated automatically (over the air update) with the correct tax rate.
It’s important to note that all VAT-registered taxpayers are required to comply by July 31, 2022.
KRA has approved ETR Suppliers to support and facilitate the VAT taxpayers to be able to comply.
Feel free to check out the list of approved ETR suppliers on the KRA website here; https://kra.go.ke/images/publications/List-of-Approved-ETR-Suppliers--Manufacturers-as-at-JUNE-2022.pdf