Business

eTIMS Lite: KRA sets March 31 registration deadline for small businesses

A file picture of the Times Tower in Nairobi, the headquarters of the Kenya Revenue Authority. (Photo: KRA)

By Rading Biko | Tuesday, March 5, 2024

All business people, including those in the informal sector and small business owners, have until March 31, 2024, to register for the electronic Tax Invoice Management System (eTIMS).

In a bid to expand revenue collection and meet targets, the Kenya Revenue Authority (KRA) has launched a new system focused on informal business enterprises.

In a press statement on Tuesday, the taxman noted that all business people, including those in the informal sector and small business owners, are required to electronically generate and transmit their invoices via the electronic Tax Invoice Management System (eTIMS).

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They have until March 31, 2024, to register for the service.

"We have availed the eTIMS simplified solutions, dubbed 'eTIMS Lite', for non-VAT registered taxpayers," KRA said. "Electronic invoicing systems will allow the reconciliation of all financial transactions for informal businesses."

These solutions are accessible through the eCitizen platforms via *222# for the USSD invoicing solution and ecitizen.kra.go.ke for the web-based invoicing solution.

This comes a few months after KRA Commissioner-General Humphrey Wattanga told the National Assembly's Finance Committee that they were struggling to tax informal enterprises.

Wattanga further said that the unclear nature of these informal enterprises and lack of transparency in their financial transactions hinders the KRA from taxing them.

"The biggest challenge we are facing is taxing the informal sector firms due to their nature of business, the high administrative costs incurred by the KRA, lack of financial statements by the enterprises and a large number of unregistered enterprises."

To increase tax literacy, the authority has held stakeholder engagements and taxpayer education initiatives, targeting parties in the informal sector including farmers and jua kali artisans. It has also partnered with informal sector groups for the provision of direct support to taxpayers using the eTIMS.

"KRA wishes to invite taxpayers and representative bodies who may experience challenges adopting the existing solutions to reach out to further explore solutions tailored to cater for their specific needs," the statement said.

"One such consideration is the reverse invoicing solution where a seller can or may give consent or authority to the buyer to issue invoices on their behalf."