It is commendable for the Kenya Revenue Authority (KRA) to develop a simplified solution for small businesses to comply with tax requirements.
Starting January 1, 2024, every transaction has to be backed by an electronic invoice but the taxman wants to shield small businesses from this requirement.
Allowing small businesses to only show records of transactions as opposed to generating and transmitting electronic invoices through the electronic Tax Invoice Management System (e-Tims) will save small businesses from the high compliance costs and concerns of gaps in technology adoption.
This is an encouraging gesture from the KRA since lumping established taxpayers with the lower-end ones would have only served to make tax compliance a burden.
The simplified system will also be of great benefit to groups such as farmers, many who don’t have the technical capacity to operate within the various internet-based solutions.
Such a move is likely to increase compliance among taxpayers as opposed to forcing them into a costly and technical system.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
