The Kenya Revenue Authority (KRA) has enhanced the iTax system, allowing Kenyan business owners to claim expenses without the provision of the Electronic Tax Invoice Management System (eTIMS) invoices.
According to the Authority, the enhancement will allow business owners to file their returns more easily and at a lower cost.
“Two significant enhancements were deployed on iTax this past Sunday, and understanding them could save you time, frustration, and potentially money during this filing period,” KRA noted.
Businesses in Kenya are required by the Authority to issue electronic invoices for transactions via eTIMS to ensure transparency, tax compliance, and a verifiable audit trail.
KRA Enhancement to Manual Non-eTIMS CSV upload
With the need to solve the challenges experienced when sellers are unwilling to issue the eTIMS invoices, the authority established a manual non-eTIMS CSV upload.
The non-eTIMS Comma-Separated Values (CSV) upload allows businesses to declare and claim valid expenses that an ETIMS invoice cannot support.
Upon uploading the CSV listing, taxpayers will be able to claim their expenses without KRA approval immediately.
“You can declare valid business expenses without eTIMS invoices using the Manual Non-eTIMS CSV upload and claim them immediately upon upload, without waiting for KRA approval,” KRA directs.
The adjustment in the eTIMS enables smart error detection, allowing the system to flag invalid PINS captured on the manual Non-eTIMS CVS.
Additionally, the system will guide the taxpayer on how to make the necessary corrections while reducing the risk of errors that derail tax filing.
According to the Authority, the manual Non-eTIMS CVS enhancement aims to bridge the informal economy and the formal tax system.
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Changes in Expenses Claiming
With the changes, taxpayers will no longer be required to include the supplier’s PIN on every expense line in the manual Non-eTIMS CSV.
Informal traders, matatu operators, farmers, roadside vendors, and Jua Kali merchants can now fill the taxes without the provision of a supplier KRA PIN and legitimately claim expenses.
However, the Authority has clarified that the supplier PIN can be included in the system if available, as the system automatically flags incorrect PINs.
Moreover, taxpayers with missing PINs will also be allowed to claim valid business expenses with the recent adjustments.
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Excluded Expenses from Etims Validation
- Airline Passenger Ticketing
- Employment expenses
- Interest Expenses
- Financial institution charged a fee
- Investment allowances and internal accounting adjustment
- Expenses subject to tax withholding
- Imported goods and services.
A person interacting with the KRA App. PHOTO/KRA
