The Electronic Tax Invoice Management System (eTIMS) is a software tool designed to offer taxpayers an easy, user-friendly, and adaptable method for handling tax invoicing. According to legislation, individuals can only claim business expenses if they are backed by an electronic tax invoice. Consequently, all businesses operating in Kenya must adopt eTIMS, utilize electronic tax invoices, and send them to the Kenya Revenue Authority (KRA) via the system.
These encompass individuals engaged in diverse business sectors, including those in the informal economy, and individuals involved in business activities, regardless of their VAT registration status. Entities such as corporations, partnerships, sole proprietorships, associations, trusts, and individuals with tax obligations, such as monthly rental income, turnover tax, and annual income tax, whether they are residents or non-residents, are obligated to adopt the eTIMS platform.
VAT-registered taxpayers who have previously adopted the TIMS Electronic Tax Registers (ETR) are permitted to continue using these devices for invoicing and transmitting tax invoices to the Kenya Revenue Authority (KRA). Nevertheless, those encountering technical difficulties with TIMS ETR devices are advised to transition to eTIMS to ensure seamless business operations.
While the eTIMS software is provided free of charge by the KRA, businesses integrating their invoicing systems directly with eTIMS may face associated expenses if they choose to collaborate with approved third-party integrators instead of opting for self-integration. The KRA has designated third-party integrators to facilitate the integration process for taxpayers, and the roster of approved third-party integrators is accessible on the KRA website. Their role involves linking the billing systems of businesses with the eTIMS platform.
Details regarding the certification process for becoming a third-party integrator or self-integrator can be found on the KRA website under the eTIMS section.
Access to eTIMS is available across various computing devices, including computers, laptops, tablets, smartphones, and Personal Digital Assistants (PDAs).
The ‘MAMA MBOGA’ Internet Narrative
As per the Kenya Revenue Authority (KRA), internet-based solutions such as online portals and the Online Sales Control Unit (OSCU) necessitate a reliable internet connection for invoice generation.
However, in instances of internet disruptions, alternative solutions like the eTIMS Client and Virtual Sales Control Unit (VSCU) enable uninterrupted tax invoice generation. Once the internet connection is reestablished, the generated invoices are automatically transmitted to the KRA.
Why E-TIMS
- It aids in reducing compliance costs as the solutions are provided free of charge;
- eTIMS offers flexibility in the solutions available and is accessible on various computing devices;
- The stock management module assists taxpayers maintain their own inventory;
- eTIMS allows taxpayers to a maintain record of invoices issued on the taxpayer portal;
- eTIMS facilitates simplified return filing for taxpayers.
How to Onboard E-TIMS
- Go to the eTIMS Taxpayer Portal etims.kra.go.ke
- Click on the Sign-Up button and input your PIN.
- One Time Password (OTP) will be sent to your iTax-registered mobile number.
- Input the OTP sent to your registered mobile number on the signup page and you will be prompted to create a password for your profile.
- Log in to the eTIMS taxpayer portal using your User ID (KRA PIN) and the password created during sign-up.
- Click on the Service Request button and select your preferred eTIMS software solution listed under the “eTIMS Type” menu.
- You will then be required to upload a copy of your ID if you are a sole proprietor or a copy of the ID of at least one of the directors for companies or one of the partners for partnerships.
- Once you submit your application, an authorised KRA officer will verify the application and approve it as appropriate.
- To verify whether an electronic tax invoice is valid, scan the QR code and then input the invoice number on the ” Invoice number checker ” menu on the iTax portal.
Penalties
In its notice, the KRA reiterated the provisions of the Regulations, which provide that VAT registered taxpayers who have not complied with the requirement to only accept electronic tax invoices will not be issued with their tax compliance certificates. Therefore, their VAT refunds will not be processed, and neither will taxpayers be able to claim input tax.
Under the Finance Bill, 2023 that was recently placed before Parliament, traders who do not issue electronic tax invoices to customers are likely to be fined either KES 1 million or 10 times the amount of tax due, whichever is higher.