The Kenya Revenue Authority (KRA) has offered relief to farmers and small enterprises by removing the need for them to generate electronic invoices for their sales.
Since the threshold for generating an electronic invoice has been set at Sh5 million by the new laws for the introduction of electronic tax invoice management (eTims), the majority of micro, small, and medium-sized firms (MSMEs) will be exempt.
The Tax Procedures (Electronic Tax Invoice) Regulations, 2023 exempt nine transactions from the electronic tax invoice. These transactions are supplies made by companies with an annual turnover of less than Sh5 million.
However, the KRA has come up with a new system that would help the taxman monitor the stock changes for small businesses, especially farmers who supply to co-operative societies.
Instead of creating and sending electronic invoices via eTims, small firms will only be able to view transactions under the new system, whose rollout has not yet been approved.
Starting this month, every business must submit an electronic tax invoice for every transaction they complete. If they don’t, they won’t be able to deduct the cost from their income tax return.