How To Upgrade To New eTIMS VAT Payment System

Down every street in every town/city, and even inside living rooms, businesses are thriving. In living the spirit of entrepreneurship, or hustling as it is known these days, Kenyans have become ever so more creative in making that extra coin.

Tax compliance has been a hard nut for Kenya Revenue Authority (KRA) with businesses using every opportunity to avoid paying or remitting value-added tax (VAT). The main reason has been the complicated procedure of compliance which include, among others, invoicing, generating ETR receipts and filing monthly VAT returns.

“It’s tedious,” says Seth Mwangi, who runs a retail shop in downtown Nairobi. “You need someone to do it for you and that’s an extra expense.”

To enhance compliance and make it easier for thousands of business people like Mwangi to manage their VAT collection and payment, Kenya Revenue Authority introduced the Tax Invoice Management System (TIMS), a device-based solution that integrates an Electronic Tax Register (ETR) machine or a control unit with their billing system to transmit invoices.

Last year, businesses were given up to 30^th November 2022 to purchase the upgraded ETR devices which would allow for real time transmission of invoices. While over 90% of large and medium taxpayers complied with the directive, a segment of small business owners complained about the overall cost of adopting to the new ETRs

KRA has now upgraded TIMS to eTIMS, a software solution which provides technological convenience to meet taxpayers’ compliance needs. “eTIMS can be accessed through various electronic devices including computers and mobile phone Apps, making it more convenient, user-friendly and flexible for businesses to use,” says KRA.

This upgrade will enhance the efficiency of transmitting electronic invoices to KRA in real-time. KRA says this software version of the system is available to taxpayers for free.

This latest version will be available through three channels, providing Tax Payers with convenient ways to issue tax invoices and have them transmitted to KRA in real-time: online, mobile and application.

The online portal will enable Tax Payers to issue tax invoices and have them transmitted to KRA in real-time, while the mobile application will run on mobile phones and provide another avenue for issuing tax invoices.

Besides, an application will be available to facilitate integration with businesses that prefer to continue using their existing billing systems.

 Key features of eTIMS

eTIMS is a convenient solution for taxpayers to meet their tax obligations and offers access through an online portal, mobile application and Virtual Control Unit (VCU). There is also the alternative of eTIMS for laptops and desktops or mobile phones.

Taxpayers with invoicing systems (ERPs) can also use the Virtual Control Unit (VCU) invoicing system, which facilitates integration with businesses that prefer using their own billing systems. eTIMS also incorporates a Supply Chain Module (SCM), which manages inventory, thus enabling tax payer to track transactions.

Streamlining VAT process

This upgrade will significantly enhance the experience of taxpayers in managing their tax invoices as well as streamline the process of managing tax invoices, making it easier and more efficient.

James Wanalo, reacting to this development on Facebook, said: “I was actually waiting for this upgrade. At least small businesses that cannot afford an ETR machine can also do business that involve tax transactions.”

Allan Eric Juma, another business person, said “This is the way to go. The way the TIMS ETR machines were designed could not work for us. We only need dedicated internet provider with no down-times. We also appreciate the fact that we can use our own system generated invoices as opposed to the 18-digit CU invoice numbers.”

Businesses with upgraded ETR devices

TIMS ETR devices will continue to be in use until advised to migrate fully into eTIMS.  Roll-out of eTIMS will be done through a phased approach. As such, there will be continuous engagements with taxpayers throughout the implementation.

Benefits of adopting eTIMS

The objective of eTIMS is to reduce the cost of compliance for VAT registered businesses. Through integration with eTIMS businesses will benefit from real time invoice transmission providing accuracy in tax invoice declarations and reconciliation between filed returns and payments. This will also eliminate the need for multiple hardware purchases.

Who should use eTIMS?

VAT registered taxpayers facing challenges integrating with TIMS ETR devices.

Taxpayers dealing in bulk invoicing and facing capacity/performance issues with invoice transmission.

VAT registered taxpayers facing challenges integrating with TIMS ETR devices.

You can download the eTIMS HERE

Related >> Understanding The eTIMS System Which Makes Filing VAT Even Easier