Thousands of sugarcane farmers supplying Butali Sugar Mills are staring at possible losses on their cane that could stay longer in farms after the miller asked them for invoices through the electronic Tax Invoice Management System (eTIMS).
In a circular, the miller on Wednesday said attempts to get a simpler way that accommodates the farmers' needs from the Kenya Revenue Authority (KRA) flopped.
The KRA set March 31 as the deadline for all businesses to onboard on eTIMS, a system that provides it with visibility of business-to-business transactions, for cross-verification of tax claims by different businesses.
“As a result of the above, with effect from 1st April 2024, each farmer is required to issue an e-TIMS invoice for every cane supply/delivery made to the factory. We will be unable to process and pay you for cane delivered unless you as our farmers provide us with a valid Electronic Tax Invoice,” the miller said in the April 3 circular.
Effective January 1, 2024, the KRA ruled that any business expenditure not supported by a valid electronic tax invoice shall not be deductible for income tax.
What this means is that for a business to be allowed to recognise a cost it incurred during its operations, a supplier must use the eTims invoicing. “We have held a series of meetings with KRA with a view to resolving this in a more simplified way but to date, an amicable solution has not been found, but we continue to have discussions with them and hopefully we agree on a simplified way to resolve this in the coming weeks,” the miller said.
“We ask you to bear with us and be patient as we seek a lasting solution to this matter and we thank you all for your continued support and partnership,” the miller said.
