Manufacturers and traders risk a Sh1 million fine or a jail term of three years from this month if they fail to install and only use upgraded electronic tax registers (ETRs) at their premises.

The taxman on Tuesday warned it had started the crackdown on non-compliant traders.

Under the new system, Kenya Revenue Authority (KRA) will receive sales and invoice data from all registered firms and traders daily in a fresh push to boost revenue collection and curb tax evasion.

“KRA would like to remind the public that effective June 1, 2023 all VAT registered taxpayers are required to only accept electronic tax invoices from registered taxpayers...for purposes of claiming input tax and processing of VAT refunds,” said the taxman.

“Enforcement measures shall be instituted against VAT registered taxpayers who will not comply by June 1 2023.”

The new system grants the taxman real-time access to invoices. It also means businesses will not use suppliers who do not have a Tax Invoice Management System (TIMS) machine.

“Input VAT can only be claimed if supported by a TIMS invoice,” said Nikhil Hira, a tax expert and business partner at Kody Africa LLP.

“For income tax purposes, deduction will not be permitted without a TIMS invoice.”

The move comes as the taxman moves to seal revenue leaks and boost State coffers as part of the efforts to reduce reliance on public debt.

Traders will also be required to seek the taxman’s permission to perform any other business the next day under the system, meaning incorrect or incomplete data logged the previous day could lock them out.

Businesses have been digging deeper into their pockets to bear the cost of procuring the new registers. Besides the upgraded ETR software, traders are supposed to procure software for the devices.

The ETR retails at between Sh45,000 to Sh120,000, while the billing software is about Sh80,000.

Suppliers have been recording booming business amid the scramble by firms to comply. The new ETR will upgrade the current manual tax registers that store sales data for scrutiny by KRA after 30 days. 

“The system seeks to enhance compliance. With the existing situation where we have most of the processes being manual, we don’t have visibility of vatable transactions,” Hakamba Wangwe, the KRA chief manager in charge of TIMS operations, said earlier.

The new ETRs will be connected through the Internet to KRA’s systems, allowing the taxman to monitor all transactions in the traders’ point of sale and invoicing systems. - Brian Ngugi, The Standard

NAIROBI, Kenya

Conference highlights importance of sustainable urbanization across globe

The second session of the UN-Habitat (Human Settlements Program) Assembly has commenced in Kenya’s capital Nairobi, attracting over 5,000 representatives and ministers from many nations.

The five-day assembly was inaugurated on Monday by Kenyan President William Ruto, who emphasized the significance of enhancing UN-Habitat's capacity to support member countries in advancing sustainable urbanization.​​​​​​​

During his opening remarks, Ruto shed light on the specific challenges and opportunities faced by African nations in the realm of urbanization.

With Africa experiencing rapid urban growth, he stressed the urgent need to prioritize sustainable urban planning and development across the continent.

"Urban centers have always held the most intense concentrations of both the best and the worst human possibilities: wealth and poverty, well-being and suffering, dignity and misery," Ruto said.

Vice President of Botswana Slumber Tsogwane, for his part, said: "For Africa, if urbanization doesn't come with digital economic transformation, mindset change, and the industrialization dynamic as expected, it will be a missed opportunity."

He stressed the importance of integrating digital technologies and fostering industrial growth alongside urbanization to unlock Africa's full potential.

"Our efforts require complementary solutions that include all stakeholders. It cannot be business as usual. We need to inspire the coming generation to actively participate in shaping sustainable urbanization."

Maimunah Sharif, the executive director of UN-Habitat, echoed the call for cooperation and emphasized the importance of human rights in sustainable urbanization efforts.

"We need member states to prioritize national and local cooperation as the basis of a just transition. Let us never forget human rights and the UN Charter as the foundation for sustainable urbanization," Sharif emphasized during her address to the assembly.

Addressing the magnitude of the challenge at hand, Sharif added: "The challenge before us is enormous. the only way we can achieve positive and transformative impact on the ground is not to go at it alone but to embrace multilateral action."

The second UN-Habitat Assembly aims to build on the progress made since its inaugural session, focusing on implementing the new urban agenda and the sustainable development goals set forth by the UN.

The gathering also provides a unique opportunity for member states, civil society organizations, and other stakeholders to forge partnerships, share experiences, and shape policies that promote sustainable urbanization, according to the UN. By Andrew Wasike, Anadolu Agency