Editorials

Make new ETRs affordable

etr

A new model of Electronic tax register (ETR) machine for automatic transmission of tax data. PHOTO | LUCY WANJIRU | NMG

Kenyan traders risk a Sh1 million fine or a jail term of three years if they fail to procure an upgraded electronic tax register (ETR) in the next one month, which will grant the taxman real-time access to their invoices.

The Kenya Revenue Authority (KRA) requires businesses to buy and deploy the new Internet-enabled ETRs that track invoicing at every turn of a transaction to assess the tax dues promptly by July 31. The KRA says the system will enhance compliance in the shift from the current manual process in which the taxman does not have visibility of taxable transactions.

The new ETRs will be connected through the Internet to KRA’s systems allowing it to monitor all transactions in the traders' Point-of-Sale and invoicing systems.

This is the latest tool at the disposal of the taxman in efforts to ensure every citizen pays their fair share of taxes. However, this will come as an extra cost for businesses.

Besides the upgraded ETR, traders are also supposed to procure software for the devices.

The KRA has approved 16 suppliers to sell the upgraded ETRs. The suppliers sell the gadgets between Sh45,000-Sh120,000 while the billing sofware is now retailing at about Sh80,000.

In the current environment, it would be in the best interest of he KRA to ensure that the cost of acquiring these gadgets does not become a barrier to compliance for small businesses.