Kenyan traders, businesses given deadline to deploy new machine or face Sh1 million fine

Kenyan business people have until July to install the new KRA-approved devices which cost between Sh45,000 to Sh 120,000 and an additional Sh80,000 for the software

KRA-approved ERT devices

The Kenya Revenue Authority has given businessmen and traders only one month to purchase and install the new upgraded electronic tax register machines on their premises.

KRA seeks to monitor businesses’ real-time invoices using the new gadgets that have been upgraded to automatically send data to the taxman.

Businesses and traders who fail to comply by July 1, risk a Sh1 million fine or three years of jail time.

If a VAT registered taxpayer does not comply within the specified period then we invoke section 53 of the VAT Act which says that you will either be fined Sh1 million or three years imprisonment or both if you don’t comply within the specified timeline,” said Hakamba Wangwe the chief manager in charge of Tax Invoice Management System (TIMS) operations.

KRA has given 16 suppliers to offer the new gadgets which will also require the installation of new software.

According to one of the approved suppliers, the devices are selling between Sh45,000 and Sh120,000 depending on the specifications.

The billing software is being sold for about Sh80,000, with the cost of upgrading to the new requirements being absorbed by the traders.

Currently, the taxman has been using manual tax registers that allowed KRA staff to scrutinise them after 30 days.

The new devices will now send the data automatically to KRA through the internet allowing the taxman access to all of a business’ vatable transactions.

This is one of the measures that KRA has instituted to help realise its revenue targets.

Pressure has been piling on the agency to collect enough money to fund government operations in the wake of rising debt.

KRA is also planning on introducing the wearing of body cameras by its officers to mitigate tax cheating.

The proposal will require officers from the domestic tax department and customs & border control to wear cameras attached to their uniforms during working hours.

"Very soon we will also be ensuring our enforcement officers have body-worn cameras, like the ones you see in the US so that any action they take is recorded and we can see it. When you put it off, we will also have to understand why you do it.

"This is so that as you engage out there, you do not get involved in activities that will compromise our objectives. We have to employ risk management where our risks are highest, so they will be more for our officers at border points where things are moving in and out and all our custom areas," KRA Commissioner General Githii Mburu said.

According to KRA, the country loses almost Sh12 billion in revenue to tax cheats and has been mitigating the loopholes to meet its targets.

The taxman’s target for the year ending June 2022 was increased by Sh25 billion to Sh1.8 trillion.

KRA was already predicting that it would surpass its initial target of Sh1.77 trillion by Sh140 billion.

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