In a significant move toward modernization, the Kenya Revenue Authority (KRA) has set a compelling deadline of January 1, 2024, urging all businesses to transition to electronic invoicing through the eTIMS platform. This directive, embedded in the Finance Act 2023, marks a pivotal step in enhancing efficiency, transparency, and compliance in the business taxation landscape.
What is eTIMS and Why the Shift?
eTIMS, a cutting-edge software solution, emerges as the technological catalyst driving this transformative shift. Designed for user convenience, businesses can access eTIMS seamlessly through various electronic devices, including computers and mobile applications. The objective is clear: streamline compliance processes and reduce costs, particularly for VAT-registered businesses.
According to KRA, the mandate extends to all taxpayers engaged in business activities, encompassing not only those registered for VAT but also those under turnover tax, monthly rental income, partnerships, corporation tax, and individual income tax, including non-residents with a permanent establishment in Kenya.
Key Features and Benefits of eTIMS
- User-Friendly Interface: The eTIMS platform promises user-friendly interactions, making it accessible and convenient for businesses of all sizes.
- Real-time Invoice Transmission: Integration with eTIMS facilitates real-time transmission of invoices. This not only ensures accuracy in tax invoice declarations but also enhances the reconciliation process between filed returns and payments.
- Target Audience for eTIMS Adoption:
- VAT-registered taxpayers yet to onboard, facing integration challenges with TIMS ETR devices.
- Businesses involved in bulk invoicing experiencing capacity/performance issues with invoice transmission.
Navigating the Onboarding Process:
- Download and Fill eTIMS Commitment Form: Interested businesses should initiate the onboarding process by downloading the eTIMS commitment form. Completing this form accurately is the first step toward embracing the digital transition.
- Application on eTIMS Portal: VAT taxpayers proceed to the eTIMS portal, sign up, and make an application for their preferred software option. The application process allows the selection of only one software option at a time.
- KYT (Know Your Taxpayer) Interview: Authorized KRA officers conduct a KYT interview to understand crucial aspects such as the nature of business, frequency of invoicing, and the taxpayer’s access to computing devices and the internet. This information guides the selection of the most suitable software option for the taxpayer.
- Installation and Training: Upon approval, KRA officers schedule an onboarding session to install, configure, and train the taxpayer on using the eTIMS software effectively. Notably, the onboarding process is facilitated by KRA rather than ETR Suppliers.
System-to-System Integration with eTIMS:
For businesses with automated billing/invoicing systems, eTIMS offers a seamless system-to-system integration solution. This can be achieved through either an Online Sales Control Unit (OSCU) or Virtual Sales Control Unit (VSCU), catering to different operational contexts. Taxpayers can opt for self-integration or enlist a certified third-party vendor, subject to a certification process.
In essence, this transition to electronic invoicing heralds a new era of efficiency and accuracy in tax-related transactions. Businesses are encouraged to embrace this digital evolution, and with the deadline looming, the time is ripe to embark on this transformative journey with eTIMS.
