Small Businesses Required to Comply With eTIMS Tax Systems

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Friday, April 12, 2024 –All business including those with less turn over will still be required to comply with the digital revenue policy.

The Kenya Revenue Authority (KRA) has come up with immediate changes cancelling the exemption of businesses with an annual turnover of sh 5 million and below from producing invoices through the electronic Tax Invoice Management System (eTIMS).

The latest gazettement of Kenya Subsidiary Legislation 2024, therefore, eliminates these exemptions, meaning every business must be compliant with the normal digital invoicing system.

The original exemption was announced in the Tax Procedures (Electronic Tax Invoice) Regulations, 2023, identifying small-scale suppliers as among those which should not get involved.

This exemption was further affirmed in in January 2024 by the KRA which explicitly stated that supplies by resident persons generating less than sh 5 million annually would be excluded from the eTIMS requirement.

However, the deadline for mandatory on-boarding, which lapsed last month, saw a lacklustre uptake, particularly among informal sector businesses, who were the primary targets of this regulation.

KRA data released last month shows that the tax man registered only 186,530 taxpayers on the eTIMS platform — a significant shortfall from its target of 915,000, marking an 80 per cent deficit.