IMPORTANT STATEMENT

As the deadline for the implementation of the Electronic Fiscal Devices approaches, Kenya Revenue Authority has noted with concern some inaccurate statements being directed to the Authority and Suppliers of the approved devices. Kenya Revenue Authority (KRA) wishes to clarify the issues as follows:

• The ETR System is one of the tax reforms the Authority is undertaking to improve efficiency in VAT collection, enlarge the tax base to achieve a level playing ground for traders and increase revenue for the provision of the much needed public services. The recently introduced system of withholding VAT has resulted in VAT revenue growing from Ksh.2.5b to over Ksh.4.2b per month, but there is still much scope for expanding the revenue;

• Applications have been received for the registration of over 100 Electronic Tax Devices but only twenty seven (27) have qualified for registration due to the stringent evaluation criteria used;

• Currently there are 10 approved Suppliers of the approved devices. We evaluate new cases wherever applications are received. The criteria used in such evaluation is contained in the KRA Website. – www.kra.go.ke . Any trader or group of traders interested in the supply of specific electronic devices are free to apply for consideration.

• There have been concerns raised about the cost of electronic devices. The matter has been referred to the Monopolies and Prices Commissioner at the Treasury.

• The number of devices to be purchased by each trader depends on the number of Points of Sale and whether the business is computerized or not.

• To qualify for refund, the trader must attach the following:-

• Suppliers invoice and delivery records;

• Implementation job card duly signed by both the supplier and the trader as evidence for successful installation and training;

• The first or pre-commission Z-report.

All suppliers have been advised to provide those records to taxpayers/traders, and to submit similar reports independently to Kenya Revenue Authority.

• Kenya Revenue Authority has held several consultative meetings with the United Business Association to evaluate their implementation concerns and there is general agreement on the way forward. The Association has assured KRA that the negative statements being circulated do not emanate from them.

Kenya Revenue Authority wishes to thank all traders who have purchased and installed the devices and advise others that implementation deadline remains as communicated in the media. However, KRA is ready to listen to genuine cases of traders who are not in a position to implement the devices by the deadline, if that is due to problems beyond their control. Such cases will be dealt with on a case by case basis.

For purposes of determining compliance by the deadline-date the traders/taxpayers are required to make purchase orders to show evidence of firm commitment to comply with the law. Suppliers are mandated to issue a compliance note. These commitments will be evaluated by Kenya Revenue Authority.

COMMISSIONER OF DOMESTIC TAXES