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ETR deadline: KRA gives more time to taxpayers with proof they began buying the machines

This electronic tax register is known as Incotex 300SM made by Incotex Trade Europe Limited of Bulgaria. Kenya Revenue Authority has licensed Pergamon Limited to sell the tax register in Kenya. This is a Type B tax register suitable for businesses using point of sales systems, such as hotels, supermarkets, and retail shops.
This electronic tax register is known as Incotex 300SM made by Incotex Trade Europe Limited of Bulgaria. Kenya Revenue Authority has licensed Pergamon Limited to sell the tax register in Kenya. This is a Type B tax register suitable for businesses using point of sales systems, such as hotels, supermarkets, and retail shops.

The deadline for value-added tax (VAT) taxpayers to start using new electronic tax invoicing machines is 31 July 2022. The new tax registers would replace the current Electronic Tax Register (ETR) whose use started in 2005. All registered VAT taxpayers must use the new tax register to send their tax data to KRA on real time.

Kenya Revenue Authority will allow registered VAT taxpayers until the end of August 2022 if they show evidence, they have started either buying the machines or connecting with the authority.

Ms Hakamba Wangwe, chief manager, Tax Invoice Management System, said taxpayers without the new ETR machines must send the proof to KRA before the deadline on 31 July 2022. The email address is timsupport@kra.go.ke.

“Because we’re aware most of our taxpayers are clamouring to comply, we need them to come on board,” Ms Wangwe told Water Tower. “Anyone who had placed order or is in the process of activating his device we will consider them as compliant.”

She said KRA expects those who will be allowed more time to comply by the end of August 2022. “After 31 July 2022 we’ll keep at it to ensure that they completely comply by end of the month [August 2022],” Ms Wangwe said.

For others, she said the deadline remains on 31 July 2022. “We are not moving the due date because it was set by the law.”

READ: Kenya Revenue Authority picks 9 more firms to sell new tax registers

How many registered VAT taxpayers have complied?

The compliance is not for everyone. Registered VAT are about 250,000.

Ms Wangwe said that among the 250,000, KRA is focusing on active registered VAT taxpayers. These are the registered VAT taxpayers who file VAT tax returns.

The active VAT registered taxpayers are 113,239. She said 13,000 of the 113,239 active registered VAT taxpayers have upgraded to the new ETR.

Ms Wangwe said KRA is focusing on large and medium registered VAT taxpayers. These large and medium registered VAT taxpayers account for 80 percent of KRA’s VAT collection. Small VAT registered taxpayers contribute the remainder.

“Forty percent of large and medium VAT registered taxpayers are using the new ETR,” she said. “That is where we are gauging our progress.”

“Ms Wangwe said there are a high number of taxpayers who are still in the process of connecting to the new system. “They are completing integration and activation with Tax Invoice Management System (TIMS),” she said.

Are ETR prices fair?

Price for the new ETR machine ranges from Sh45,000 to Sh110,000.

Ms Wangwe said the price range explains the technologies available in the ETR devices. For taxpayers only using a cash register the price is about Sh45,000, she said. For business using advanced billing systems they will need advanced ETR to march the technology they are using, Ms Wangwe said.

She said that at the beginning the authority was worried about the prices but after talking with suppliers the prices are now fair. Suppliers had attributed the high prices to high transport costs and falling value of the Kenya shillings.

“Prices have now stabilised after we engaged suppliers,” Ms Wangwe said. “Now prices are not going up every month.”

About Kaburu Mugambi

Kaburu Mugambi is a veteran of business reporting having worked with two national newspapers in Kenya. He is a graduate of economics from Kenyatta University. He started his journalism career in 2000 with The People Daily as a business reporter before becoming a business sub-editor. He joined Daily Nation in 2004 as a business writer. He holds a post-graduate diploma in mass communication from University of Nairobi's School of Journalism and an MBA in marketing from the same university. In 2016, he founded Water Tower, a media firm focused on water, energy and climate. Its content cuts across water, energy and climate with emphasis on adaptation and sustainability.

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