The Kenya Revenue Authority (KRA) launched the Tax Invoice Management System (TIMS) on July 13, 2021 with an expectation that taxpayers would comply by July 31, 2022.
However, following requests by taxpayers for more time to acquire and integrate devices with their invoicing systems, the KRA extended the go-live date until 30 November 2022.
Whilst the KRA has not announced an implementation date, there are indications that it may start piloting implementation from as early as February 2023.
What is the objective of eTIMS?
The implementation of TIMS has been challenging for many taxpayers, among the challenges raised include inability to handle bulk invoicing, considerations of complex processes and structures in businesses and difficulties in transmitting invoices – real time.
In response to these issues, the KRA is introducing eTIMS to reduce compliance costs primarily by reducing the cost of purchasing multiple hardware.
Additionally, real-time invoice transmissions will improve the accuracy of invoice declarations and reconciliations between filed returns and payments.
Who are the targeted users?
Notably, KRA highlighted that about 42.7% of VAT registered businesses are yet to implement TIMS. eTIMS targets all business categories: small, medium, and large taxpayers to ensure maximum compliance.
What happens to the current hardware solution?
For the taxpayers already enrolled on TIMS, existing ETR machines will continue to be used. KRA will notify taxpayers when to migrate fully into eTIMS.
KRA intends to implement eTIMS in phases. As such, there is expected continuous engagements between the KRA and the taxpayers throughout the implementation cycle.
Article by KPMG