Kenya: Traders to Fully Switch to Electronic Invoices Starting June 1

Nairobi — All VAT-registered businesses will be required to only accept electronic invoices from registered taxpayers starting June 1 2023.

According to a statement from the KRA Commissioner General, the move is in compliance with the VAT (Electronic Tax Invoice) Regulations 2020 for purposes of claiming input tax and processing of refunds.

The Commissioner General noted that VAT-registered taxpayers who will not have complied with the requirement by June 1 will not be issued with tax compliance certificates unless they comply.

“VAT refunds shall be only processed and paid for taxpayers who are compliant with the Regulations,” read the statement.

This requirement exempts registered non-resident suppliers of digital services.

The non-resident digital service suppliers are however required to issue invoices or receipts showing the value of the supply and tax charged.

The deadline comes as the Kenya Revenue Authority(KRA) continues with the rollout of the electronic Tax Invoice Management System(eTIMS) which seeks to ensure that all VAT-registered taxpayers generate electronic tax invoices that are transmitted to KRA on real time basis.

Through integration with eTIMS, businesses will benefit from real-time invoice transmission providing accuracy in tax invoice declarations and reconciliation between filed returns and payments.

KRA is banking on the platform to fully address the issue of missing trader invoices and the issue of fictitious claims as all transactions will be visible to the taxman.

The taxman seeks to collect an additional Sh400billion in VAT from the platform.

VAT collections for the financial year ended June 2022 amounted to Sh523.10 billion, an equivalent of 27.72 per cent of the Sh1.92 trillion ordinary revenue.

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