How To file KRA VAT returns using the E-TIMS

In order to streamline VAT collection and reduce instances of tax fraud, ETRs were initially implemented in Kenya in the year 2005. To help the trader account for the VAT charged at the moment of a sale, the ETR is a cash register with fiscal memory that preserves a record of all transactions. Electronic Fiscal Printers (EFPs) and Electronic Signature Equipment are two more fiscalized electronic devices that traders have utilized throughout time (ESDs).

Kenya Revenue Authority (KRA) has adopted automation over time with the goal of enhancing service delivery. The Cabinet Secretary for Treasury therefore published The VAT (Electronic Tax Invoice Regulations), 2020 in September 2020, introducing the adoption of the Electronic Tax.

This Electronic Tax Invoice: (E-TIMS)  What Is It? Is it unique from the present ETR?

Basically, in order to comply with the regulations outlined in the 2020 VAT Electronic Tax Invoice Regulations, you and other VAT registered taxpayers will need to upgrade your ETR. Through a validation process, the enhanced ETRs may verify the accuracy of the invoice data created at the moment of a transaction. The electronic tax invoice is sent to KRA via the internet in real time or very close to real time as the customer receives their copy of the invoice.

What advantages are there?

1. Automated activation of the ETR 2. Simplified return filing through the pre-filled VAT return
2. It offers a remedy for the VAT Auto Assessments (VAA) procedure.
3. The capability to validate the legitimacy of a tax invoice using the iTax portal’s invoice number checker or by scanning the QR Code.
4. KRA should process VAT refunds for businesses more quickly.
5. Facilitating trade by leveling the tax playing field – All businesses should pay their fair share of taxes.

The following process should be followed

Login using the KRA PIN & I TAX PASSWORD.

Check here if the KRA PIN is not known. If a taxpayer does not know their password, it can be reset by clicking ‘Forgot Password’ on the I-Tax system login and receiving a new password by email to the address used when registering.

Download the VAT3 Return

After all the relevant annexures have been downloaded, completed, validated and saved, the declaration form can be completed. This requires logging back into E-Tax and accessing the homepage.

Kindly consult us for further clarification.