KRA reports huge increase in VAT revenue due to eTIMS application
Chari Suche and Andrew Hinga-KNA
The introduction of electronic tax invoicing (eTIMS) has begun to bear fruits with more revenue from the Value Added Tax (VAT) obligation being collected.
Kenya Revenue Authority Commissioner of Domestic Taxes Rispah Simiyu noted that during the last financial year, 2023/2024, VAT collection registered a growth of 15.3 per cent, compared to 13.4 per cent growth registered in the previous year 2022/2023, a performance she attributed to the electronic tax invoicing.
VAT collection stood at Sh314.157 billion, against a target of Sh307.823 billion, surpassing the target by Sh6.334 billion.
Simiyu disclosed this in her presentation to the Institute of Certified Public Accountants of Kenya (ICPAK), 12th Annual Tax Convention held in Mombasa.
She noted that the electronic tax invoicing contributed to tax base expansion because of its features of enhanced visibility of taxpayer transactions especially those operating in the informal sector, and enhanced tax compliance management, and enforcement due to availability of tax invoice data to verify declarations.
“KRA assures taxpayers that we are in the process of addressing challenges affecting eTIMS implementation and online service uptake, to make the system more user-friendly and responsive to the needs of customers,” Simiyu said.
She added that among the solutions earmarked for adoption to make the system more effective, are the development of simplified solutions that include those with offline functionality and diverse and flexible solutions to help taxpayers comply in their own environment.
Other strategies, she said, included stakeholder-engagement by sector and taxpayer type, public awareness, and a decentralization of eTIMS support services to all KRA regions and Tax Service Offices.
“As an Authority we are committed to collaborating with stakeholders, and lay emphasis that the technological innovations being implemented by KRA incorporate both internal ideas and feedback from external stakeholders,” she added.
She noted that several initiatives undertaken by KRA have resulted in many positive outcomes, including increased registration of taxpayers under specific simplified tax regimes and an improved customer experience.
The Commissioner also highlighted several technological advancement opportunities being pursued by KRA, among them harnessing the taxpayer ecosystem for solution development, advanced technology-user friendly mobile and web interface to enhance compliance, development and roll out of pre-populated VAT income tax (including personal reliefs) and excise returns.