Economy

Firms get more time to install KRA sales monitoring gadgets

times-tower

The Kenya Revenue Authority (KRA) has offered firms more time to comply with regulations that demand the taxman receives real-time data on traders’ daily sales through Internet-enabled electronic tax registers.

The KRA has given firms until August 2022 to install new electronic tax registers connected to its systems for monitoring daily sales, escalating the war on tax cheats.

Initially, traders had up to September to directive under the regulations KRA published last October.

The law requires all businesses with an annual turnover of at least Sh5 million to have electronic tax registers. Under the new system, the KRA will receive sales and invoice data from all registered firms and traders daily in a fresh push to boost revenue collections and curb tax evasion.

“Kenya Revenue Authority wishes to inform the public that the rollout of the Electronic Tax Invoice pursuant to the provisions of the Value-Added Tax (Electronic Tax Invoice) Regulations 2020 shall commence on August 1, 2022,” said KRA in a statement.

“All VAT registered taxpayers shall thereafter be required to comply with the requirements of the regulations on implementation of the Electronic Tax Invoice within a period of 12 months from the date of the rollout. Where a person is unable to comply within the timelines, they shall apply to the Commissioner Domestic Taxes for extension of time to comply which shall not exceed six months as provided for in the regulations,” it said.

This will upgrade the current manual tax registers that store sales data for scrutiny by the KRA after 30 days.

The new technology will deepen scrutiny of traders’ transactions.

The move comes as the taxman, who has perennially missed tax targets, moves to seal revenue leaks against the backdrop of shortfalls due to Covid-related disruptions.

Traders will also be required to seek the taxman’s permission to perform any other business the next day under the system, meaning incorrect or incomplete data logged the previous day could lock them out.