The Kenya Revenue Authority (KRA) has spared small business owners, small sole proprietors, and farmers from eTims invoices.
According the KRA, the eTims regulations will not apply to small businesses with an annual turnover of less than Sh. 5 million.
This exemption comes as the KRA gazettes the final Tax Procedures (Electronic Tax Invoice) Regulations 2023. These are the regulations that are guiding the implementation of Finance Act 2023’s amendment to Section 23A and Section 86 of the Tax Procedures Act on mandatory eTIMS onboarding.
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Following this, Kenyans with businesses with turnover of less than Sh. 5 million per annum will henceforth be exempted from eTIMS generated invoices.
At the same time, Kenyans with withholding tax as a final tax have also been exempted from eTIMS generated invoices.
Starting January 1, 2024, all businesses had been required to produce an electronic tax invoice for all the transactions they conducted. Businesses that failed to do this wouldn’t have been able to claim the expense when filing for Income Tax.
Earlier on, KRA had said that it would not accept invoices from suppliers who had not been captured on e-Tims for purposes of collecting value-added tax (VAT), which is charged at 16 per cent.
As at mid-December, KRA announced that it had on-boarded almost all the registered VAT taxpayers, who included mostly large and medium taxpayers on eTims.
The KRA said that there were a total of 250,000 registered VAT taxpayers, with 76,960 having been on-boarded through eTIMS.
