News from Business Daily Africa, has revealed that the Kenya Revenue Authority (KRA) is set to install new electronic tax registers at business premises across Kenya.
The Electronic Tax Registers, will give the Kenya Revenue Authority (KRA), access to invoices issued by traders around the country, in real time.
Under the proposed system which is part of its high tech war against tax cheats, the Kenya Revenue Authority (KRA), will require manufacturers, suppliers and traders to deploy new Internet-enabled Electronic Tax Registers (ETRs).
The new Internet-enabled Electronic Tax Registers (ETRs), will allow the Kenya Revenue Authority (KRA) to track how businesses conduct their invoicing at every step during transactions to assess the tax dues on a real time basis.
The Kenya Revenue Authority (KRA), will also receive data of the sales from all registered companies and traders on a daily basis.
Part of the capabilities of the proposed new system and Electronic Tax Registers (ETRs) that the Kenya Revenue Authority (KRA) intends to release, reads, “The control unit should send end-of-day summary after all the invoices for the respective day have been transmitted, and before starting invoice transmission for the next day”.
In addition, Traders will also be required under the new system to seek permission from the Kenya Revenue Authority (KRA), in order to perform any other business transactions the next day of business.
This means that incorrect or incomplete data logged in the previous day could potentially lock them out.
In its statement regarding the new system, the Kenya Revenue Authority (KRA) stated that, “KRA is implementing a Tax Invoice Management System to achieve validations and authentications of tax invoices at trader tills before generation of invoices along with their real time or near-real-time transmission,”.
The Kenya Revenue Authority (KRA) in a notice, added that, “TIMS is an information technology integration system that will integrate trader systems (Electronic Tax Registers, Point of Sale, and ERP-Billing/Invoicing system) with iTax to monitor the generation of electronic tax invoices and their transmission through the internet to it”.
All businesses that have an annual turnover of at least 5 million Kenyan Shillings, are required by law to have electronic tax registers.
The new technology is expected deepen scrutiny of transactions by traders as they will be required to account for all their trading transactions.
While the cost of compliance and procurement of the new devices is expected to be shouldered by the traders and manufacturers upon release, they (the traders and manufacturers), may opt to pass the cost on to the consumers, leading to an increase in the prices of their products.
In November 2018, President Uhuru Kenyatta also directed the Kenya Revenue Authority (KRA) to use the 3 billion Kenyan Shillings Huduma Number biometric data to smoke out individuals and establishments who evade taxes.
President Uhuru Kenyatta during the KRA 2018 Taxpayers’ Day in Nairobi which recognizes compliant taxpayers countrywide said, “The use of technology as an enabler is an immediate necessity and KRA must incorporate cutting edge technology in all aspects of its operations from customer care to detection of tax evasion. Use of big data to detect revenue trends and to detect leakages should be the norm.”
“I therefore expect that KRA will leverage the benefits of the soon to be rolled out National Integrated Identity Management System as another tool in their arsenal.”
