The VAT (Electronic Tax Invoice) Regulations, 2020
The KRA has given firms until August 2022 to install new electronic tax registers connected to its systems for monitoring daily sales on real time basis. This will curb Tax Cheats especially coming at a time when Kenya Revenue Authority in under intense pressure to collect more taxes.
These Value Added Tax (Electronic Tax Invoices) Regulations, 2020 have been enacted to ensure that daily supply of goods and services is monitored for purposes of taxation. As such, these Regulations require every VAT registered person under section 34 of the Value Added Tax Act (“VAT Act”) to have a register.
The Register shall be capable of transmitting to the KRA’s system, the tax invoice data and the end of day summary of the respective day’s data in the manner specified by the Commissioner. KRA shall have real time information and this will also eradicate the VAT inconsistencies which have caused problems as Output and Input declared sometimes results in mismatched data.
All VAT registered taxpayers shall be required to comply with the requirements of the Regulations on the Implementation of the Electronic Tax Invoice within a period of twelve (12) months from the date of the Roll out i.e. effective roll out date is 1st August 2021.
The VAT registered taxpayer can on application to the Commissioner, at least 30 days before the deadline, seek for an extension of compliance which shall not exceed six months.
Failure to comply with the Regulations will result in a conviction and one shall be liable to pay a fine not exceeding one million shillings, or imprisonment for a term not exceeding 3 years, or both.