ETIMS: How New Tax Compliance System Will Work, Who Qualifies And How to Apply

• All businesses are supposed to have integrated eTIMS into their invoice generation systems and sales
• Businesses will have to ensure their suppliers are also integrated on eTIMS so that their expenses are exempt from taxes
• eTIMS onboarding begins by downloading the eTIMS commitment form before proceeding to sign up on the eTIMS portal

Elijah Ntongai, a journalist at TUKO.co.ke, leverages more than three years of expertise in financial, business, and technology research, providing insights into both Kenyan and global economic trends.

The Kenya Revenue Authority (KRA) has insisted that all businesses need to be able to electronically generate and transmit their invoices to the taxman via eTIMS by the January 1, 2024 deadline, as stipulated in the Finance Act 2023.

eTIMS is the abbreviation of the Electronic Tax Invoice Management System, a software solution that offers technological convenience to fulfil taxpayers' compliance requirements.

Who is eligible for the eTIMS?

Every business entity, including those not registered for VAT, must electronically generate and transmit their invoices to the KRA through the eTIMS system.

"Kenya Revenue Authority (KRA) wishes to notify the public that pursuant to the provisions of the Finance Act 2023, effective 1st September 2023, All persons carrying on business, including those not registered for VAT, are required to electronically generate and transmit their invoices to KRA via the electronic Tax Invoice Management System (eTIMS)," KRA said in a public notice.

What happens if you don't onboard eTIMS?

Per the Finance Act 2023, unless an expense invoice was generated through eTIMS, it will not be deducted from the taxable income.

This means that businesses must ensure their suppliers are also integrated on eTIMS so that their supply expenses can be deducted from the taxable income.

Without eTIMS, businesses will also be unable to get tax compliance certificates, which is necessary to get tax refunds from KRA.

How to integrate eTIMS in business transactions?

KRA is undertaking awareness campaigns through the KRATV on YouTube, providing video courses to help people understand eTIMS.

eTIMS onboarding begins by downloading the eTIMS commitment form before signing up on the eTIMS portal.

Farmers Choice says all farmers (suppliers) must have eTIMS

In other related news, Farmers Choice, popularly known for producing smokies, notified all Rosemark and Choice Meats Division suppliers to ensure they onboard eTIMS following the implementation of the Finance Act 2023.

The company said it will not buy from farmers who will not have complied with the new regulations.

"The amendments in the Finance Act 2023 means that each and every purchase made by the company of whatever goods and services must be accompanied by the required Electronic Tax Invoice Management system generated invoice, whether the suppliers of such goods are registered for VAT or not," Farmer's Choice said in the notice dated August 14, 2023.