After protests from the Kenya Private Sector Alliance (KEPSA) and evidence of reduced availability of new ETR machines, the Kenya Revenue Authority has extended by two months, until 30 September, the transition of VAT registered taxpayers from the old tax registers to the real-time electronic tax invoice management system.
The extension follows a meeting with stakeholders on Monday, 1 August at the Revenue Office in Nairobi.
The meeting also revealed that no specific compliance costs could be demanded because the VAT regulation on electronic invoices drafted in 2020 did not provide details on this.
Last month, the KRA alerted the public and all taxpayers of the 31 July deadline to comply and obtain the new machines or, for those who already had those ready to upgrade, to equip them with the new system. The fine for those who failed to comply, as of 1 August, would be one million shillings or alternatively, three years imprisonment on charges of attempted tax evasion. Although many companies faced higher costs to comply within the timeframe than they were told, many tried to comply, but at some point the availability of ETR machines ran out.
With the new system, the tax authorities will receive daily sales and invoice data from all businesses and traders registered on its digital system, iTax. The move aims to minimise tax fraud and increase revenue. In fact, the KRA expects to increase VAT collections to 35 per cent in this way.