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KRA: Why Kenyans are being asked to submit PINs at some fast food joints

KRA responds after a customer said he was asked to submit their PIN while ordering food at a local fast food joint

Chow down on a burger and fries from In-N-Out Burger, a West Coast classic and celebrity-favorite fast-food joint.
  • Viral video showing KRA PIN requirement at a local fast food joint
  • KRA response to PIN requirement at a local fast food joint
  • KRA eTIMS and how to compute income tax

A video has gone viral on social media in Kenya showing a new feature at a KFC branch in Nairobi, Kenya.

The footage taken by a customer captures him using a self-ordering machine at the popular fast-food chain.

During the order, the machine asks the customer to enter their Kenya Revenue Authority (KRA) Personal Identification Number (PIN) to proceed to the checkout process.

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This technological innovation, designed to streamline the ordering process for customers facing long queues, has sparked a debate over tax compliance implications.

The customer, narrating his experience, said "KFC has a machine you can self-order if the queue is long so when you check out it asks you for your KRA Pin."

The video further demonstrates that despite the prompt to enter a KRA PIN prompt, the machine also provides an option to bypass this step and proceed directly to the payment methods.

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Responding to the debate and seeking to clarify the situation, the Kenya Revenue Authority explained the rationale behind the request for KRA PIN details.

According to the KRA, "you are only required to provide your PIN details if you intend to claim an input from the purchase."

This explanation indicates that the provision of KRA PIN details at KFC's self-ordering machine is primarily aimed at enabling customers who wish to claim tax-related benefits associated with their purchase, rather than being a mandatory requirement for all transactions.

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KRA has been at the forefront of embracing digital innovation to simplify tax compliance and administration, a move that has transformed the business landscape in Kenya.

One of the cornerstone systems in this digital transformation journey is the electronic Tax Invoice Management System (eTIMS).

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This platform is designed to streamline the process of managing tax invoices for businesses, making it easier for them to comply with tax regulations and file their taxes accurately and efficiently.

eTIMS allows businesses to generate, manage, and validate tax invoices electronically, ensuring that all transactions are accurately captured and stored in a manner that is compliant with KRA's regulations.

The system is engineered to facilitate the real-time transmission of invoice data to KRA, providing a seamless flow of information between businesses and the tax authority.

This real-time data capture mechanism plays a crucial role in enhancing tax compliance and minimizing the risk of errors in tax reporting.

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  • Record Keeping: eTIMS ensures that all sales transactions are accurately recorded and stored. These electronic records serve as a reliable source of information for businesses when preparing their tax returns.
  • Tax Deductions: The system allows businesses to keep track of deductible expenses accurately. By maintaining a detailed record of all transactions, businesses can easily identify which expenses are eligible for deductions, thereby reducing their taxable income.
  • Compliance Verification: With eTIMS, businesses can provide verifiable evidence of their compliance with tax regulations. The system's ability to generate and store electronic invoices means that businesses can quickly furnish necessary documentation during audits or inspections.
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In the realm of tax computation, expenses play a pivotal role in determining the tax payable by a business.

Essentially, the tax payable is calculated by taking into account the gross income of the business and then subtracting allowable expenses and deductions to arrive at the taxable income.

  • Allowable Expenses: These are costs that are incurred wholly and exclusively in the production of income. They can include costs such as rent, salaries, utility bills, and costs of goods sold, among others. eTIMS helps businesses to accurately document these expenses.
  • Tax Deductions: Apart from expenses, businesses may also be eligible for certain tax deductions, such as investment deductions or wear and tear allowances on capital expenditures. These deductions further reduce the taxable income.
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  • Calculating Taxable Income: Once the total income is determined, and all allowable expenses and deductions have been subtracted, the remaining amount represents the taxable income. This is the figure upon which the tax rate is applied to compute the tax payable.
  • Tax Credits and Withholding Taxes: Businesses may also be entitled to tax credits or have had taxes withheld at source. These amounts are accounted for in the final tax computation, further adjusting the tax payable.

eTIMS plays a crucial role in this process by ensuring that all transactions, including income and expenses, are accurately captured and documented.

This accuracy is vital for businesses to compute their tax payable correctly, ensuring compliance with tax laws and minimizing the risk of penalties for underreporting or non-compliance.

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