Through invitation by KRA after analysis of the compliance history or the taxpayer can request to be enrolled.

How long does the green channel enrolment process take?

 Upon approval by the commissioner and subsequent acceptance of the terms and conditions by the taxpayer

You can remain in the green channel as long as the framework exist. However, there is frequent vetting and verification of the green channel list to uphold compliance.

The taxpayer will be;

Disqualified  from the Green Channel list.

Subjected to in-depth audits for the periods paid under the green channel framework.

In case of fraud, you will charged according to the VAT Act 2013 and the TPA Act  of 2015.

The VAT Act of 2013 and the VAT (Electronic Tax Invoice) Regulations, 2020 provide the legal basis.

The twelve-month transition period that started from August 2021 ended on 31^st July 2022.  The extended deadline for taxpayers to comply is 30th September 2022 as per the public notice issued on 1st August 2022. Extension of deadline for compliance with Tax Invoice Management System (TIMS) - KRA

Yes. Where a person is unable to comply within the timelines provided, they will be required to apply to the Commissioner for extension of time, which shall not exceed six months, as provided in the Regulations.

The application for extension shall be made in writing thirty (30) days before the expiry of the transition period.

The Tax Invoice Management System (TIMS) is an upgrade of the current Electronic Tax Register (ETR) regime that was rolled out in 2005.

It will facilitate electronic tax invoice management through standardization, validation, and transmission of invoices to KRA on a real time or near real time basis.

A taxpayer must:

• Be VAT Registered as per the provisions of the VAT Act 2013
• Have an invoicing system with the capability to transmit invoices to KRA systems
• Have internet connectivity

KRA has published guidelines for taxpayers which can be accessed on this link;

https://kra.go.ke/images/publications/Guidelines-for-VAT-Taxpayers-2021.pdf

The following are the key features in a valid invoice:

1. PIN and Name of trader;
2. Time and Date of the Invoice;
3. Invoice Serial Number;
4. Buyer PIN (Optional)
5. Total Gross Amount;
6. Total Tax Amount;
7. Tax Rate;
8. Total Net Amount;
9. Unique Register Identifier;
10. Digital Signature (QR Code);

Taking into consideration the transition period, the new features e.g. the QR Code, will only be visible once a VAT registered trader his using the Tax Invoice Management System.

NB: The QR Code will only give a result where the invoice has been transmitted to KRA.

ETR Suppliers will support the traders to automatically update the tax register to reflect the change.

The VAT taxpayer should continue using the tax register as usual. Once the internet connectivity is restored, the invoices generated and stored in the tax register’s memory will be automatically transmitted to KRA.

A trader will be required to report the malfunction of the register to a service person, and report to the Commissioner in writing within 24 hours.

 In the period that the ETR is not working the trader will record sales using any other means as specified by the Commissioner.

Only VAT registered taxpayers are required by law to use a tax register as per the VAT Act (2013) and the VAT (ETI) Regulations (2020)

Yes, the requirement to adopt a compliant ETR applies to all VAT registered taxpayers regardless of the billing system in use.

Failure to comply with the Regulations is an offence which will attract penalties as specified in Section 63 of the VAT Act, 2013, that is, they shall be liable to a fine not exceeding Kshs. 1 million, or to imprisonment for a term not exceeding three years, or to both. In addition, upon full implementation, VAT Registered taxpayers will only be able to claim input tax and refunds using TIMS compliant tax invoices.

Taxpayers who had made manual applications are requested to lodge an application via the iTax platform and attach a copy of the manual application together with evidence of payments already made as supporting documents. Once the Tax Service Office has reconciled the payments and confirmed that full payment of the taxes disclosed have been made, the taxpayer shall be issued with a certificate.

KRA has published the list of approved Suppliers and their Manufacturers on the KRA website.

Taxpayers will be able to issue credit notes and debit notes as provided for in Section 9 (2) the VAT (Electronic Tax Invoice) Regulations 2020. In order to generate a credit or debit note, the taxpayer will need to reference the original invoice number on which the supply was made.

Withholding VAT will still be operational as per Section 25A of the VAT Act 2013.  Traders will continue to issue invoices as usual and utilize their Withholding VAT credits in their respective VAT returns every month.