By Victor Orandi
The Kenya Revenue Authority (KRA) is set to start monitoring businesses’ daily sales. This follows the publication of the Value Added Tax (Electronic Tax Invoices) Regulations 2020 (Regulations) on 10th September 2020.
The Regulations will require businesses with an annual turnover of at least Ksh. 5 million to install an electronic tax invoicing or receipting system (Register) that will enable KRA to receive daily sales and invoice information from the registered businesses. The Register shall be integrated with KRA systems and businesses will be expected to have installed the Register by September 2021. This is in a bid to curb tax evasion and expand KRA’s tax net.
A business shall record each sale and generate an invoice in respect to such sales. The business shall then be expected to transmit or deliver the invoice details to KRA, as shared with the purchaser. Any system failures that may affect the operations of the Register shall be communicated to KRA within twenty-four hours of such failure.
The invoice shall contain, among other details, the PIN of the business, the serial number of the invoice, the buyer’s PIN, the unique Register identifier, the unique invoice identifier and a quick response (QR) code. In the event the business issues a credit or a debit note, the credit or debit note shall indicate the PIN and invoice number to which the supplies relates.
The business shall be required to issue thirty days’ written notice in the event it intends to discontinue use of the Register due to factors such as the closure of business and cessation of supply of vatable supplies. KRA may shut down the Register upon issuing thirty days’ written notice to the business.
A registered business that fails to comply with the Regulations shall be liable to a fine not exceeding Ksh. 1 million and/or to imprisonment for a term not exceeding three years.