Clock ticks on KRA tax register deadline
Business owners are caught in a race to comply with a directive by the Kenya Revenue Authority(KRA) to fit mandatory internet-enabled tax registers(ETRs) by November 30,2022.
A spot check showed that some small and medium-sized businesses are yet to comply with the directive just days to the deadline even though the taxman maintained that the grace period to do so lapses next Wednesday.
“The Kenya Revenue Authority would like to remind the public and all VAT (Value Added Tax) registered taxpayers that they are required to acquire and install the TIMS-compliant Electronic Tax Registers by Wednesday, November 30, 2022,” the taxman said on Thursday.
Manufacturers and traders are expected to install the upgraded ETRs that will enable the KRA to receive real-time data on traders’ daily sales, an upgrade from the current manual tax registers that store sales data for scrutiny by the KRA after 30 days. Besides the upgraded ETR devices, traders are supposed to procure software.
KRA in September extended the deadline for businesses to acquire the ETRs for the second time amid a supply hitch that has delayed the migration.
The new automated registers will help KRA receive sales and invoice data daily in the latest push to curb tax evasion and boost revenue collections.
Manufacturers and traders who fail to upgrade to ETRs at their business premises risk a fine of Sh1 million or a jail term of three years.
Businesses with an annual turnover of at least Sh5 million are under the law required to have ETRs as the KRA seeks to seal revenue leakages from the big taxpayers. But even as KRA pushed for compliance, some traders are still reporting teething software problems with the ETRs machines.
A spot check by Nation last week showed that many businesses, including some supermarket chains, have been inconvenienced by software hitches and low transaction capacity of the gadgets which are interlinked to the KRA systems.
In some retail stores, the technical hitches were often causing long queues of customers waiting to be served—a situation that could worsen ahead of the festive season as more shoppers throng outlets.