Kenya Revenue Authority (KRA) sustained its tax compliance messaging over the festive period, keeping taxpayers on their toes at a time when most had retreated into celebration mode. In both its Christmas and New Year messaging, KRA has been reminding taxpayers of their obligation of remitting taxes and filing returns.
“We hope this message finds you in great spirits as we embrace the possibilities of a brand new year,” KRA says in its Happy New Year email message to taxpayers. “As you embark on your resolutions and goals for 2024, we encourage you to add one more to your list – filing your income tax returns early. You can file your 2023 Income Tax Returns as early as now.”
A week earlier on Christmas Day, KRA had this message: “Receive season’s greetings to you and your loved ones. As the year comes to a close, KRA takes this moment to appreciate your continued support and commitment to fulfilling your patriotic duty. Your timely payment of taxes plays a crucial role in building our nation and supporting essential services that benefit Kenyans.”
The consistent push comes at a time when KRA is pulling all stops to increase tax collections to finance the country’s budget. Despite facing economic shocks and declines from some key indicators, Kenya Revenue Authority hit the one-trillion-shilling mark after collecting Ksh1.030 trillion as at 8th December, 2023.
The Authority has maintained an upward trajectory in revenue collection, after recording a 15.8% growth in the month of November when it collected Ksh180.714 billion up from Ksh156.095 billion collected in November 2022. Revenue collection had progressively increased in the last five months (July–November 2023/24) after KRA collected Ksh963.746 Billion compared to Ksh856.646 Billion collected in the same period last financial year, representing a growth of 12.5%.
Effective 1st September 2023, every person in business is required to issue, transmit Electronic Tax Invoices (ETI) and maintain a record of stocks through an electronic management system prescribed by the Commissioner (eTIMS). Further, effective 1st January 2024, all taxpayers will be expected to support expenses claimed in their tax returns with electronic tax invoices that have been generated and transmitted to KRA’s system.
KRA says expansion of electronic tax invoices to incorporate all taxpayers is part of its strategy to enhance tax compliance by leveraging on modern digital infrastructure to provide flexible tax solutions aligned with evolving business needs. “To ensure a smooth transition for taxpayers, KRA has tailored solutions within the eTIMS platform, to cater to various business models, sizes, and types of taxpayers that can be accessed on mobile phones, tablets, personal computers and laptops,” it says.
An online portal has been created for those dealing with service-oriented businesses, while system-to-system integration options are available for entities utilizing software billing systems and those engaging in bulk invoicing. To ensure a wide coverage and to support taxpayers with limited technology devices, KRA has partnered with government and private agencies for development of more simplified solutions that meet the taxpayers within their own eco-system while facilitating them to comply.
The move also seeks to streamline tax filing procedures, broaden the tax base, and ultimately bolster revenue collection efforts. For existing non-VAT registered taxpayers, onboarding to the eTIMS platform will be available up to 31st March 2024 to facilitate business continuity and allow for sufficient time for these taxpayers to make adjustments in their systems and business operations.
During the onboarding period, penalties provided in law for failure to issue electronic tax invoices will not be imposed on the non-VAT registered taxpayers. Once onboarded, they will be required to progressively capture manually generated invoices and receipts issued after 1st January 2024 up to the date of onboarding, onto the KRA system.