Did you know that it is now possible to tell if the product you are buying is tax compliant or not? With adoption of technology in the country, Kenyans can now report cases of tax evasion from merchandise bought, thanks to Kenya Revenue Authority's new technique.
This is through the implementation of the Electronic Tax Register (ETR) which streamlines the collection of Value Added Tax (VAT) to minimize instances of tax evasion.
KRA findings unraveled a Kshs.30 billion tax evasion scheme. The money could finance a sizeable portion of the government's budget. Popularly known as the “Missing Trader Scheme”, the Authority estimates that fake invoices worth Kshs.65 billion have been issued since 2015, with the peak being in 2016 when Kshs.32 billion worth of fake invoices were generated.
"ETR is a cash register with fiscal memory that keeps a record of all transactions for purposes of the trader accounting for VAT charged at the time of making a sale," says KRA.
But how can you tell if the product bought is tax compliant?
According to KRA, Kenyans need to take note of how they utilize the taxes they pay everyday. This has been enabled through a feature called Electronic Tax Invoice which will be generated by ETR. The invoice comes with the QR code that enables a customer to confirm the validity of the invoices/receipts issued by the trader.
What this means is that you can verify that the VAT you pay has been "duly remitted to KRA and by extension you have played your role in nation building."
This even as traders have up to August to comply with the ETR with a full list of 16 approved ETR suppliers and manufacturers.
In September 2020, Treasury Cabinet Secretary Ukur Yatani gazetted The VAT (Electronic Tax Invoice Regulations), 2020 that introduced the implementation of the Electronic Tax Invoice.
KRA had in June 2021 flagged a post on social media claiming that business people can file their own VAT returns without the need of an intermediary tax agent.
"In a public notice dated 22/06/2021, KRA informed all authorized Manufacturers and Suppliers of fiscal ETR devices to ensure all ETR devices can automatically send all sales information into the KRA itax system.
"The roll out will enable an automated population to the taxpayers VAT returns hence reducing filing errors, save time and complexity, making it easier for business people to file their own tax returns," the false statement read in part.
Kenya is intensifying the fight against economic crime where tax evasion schemes top the list through which billions of shillings is lost.
EACC also devised a platform with a web-based reporting system known as the Business Keeper Monitoring System (BKMS) that guarantees secure and anonymous reporting .
"EACC has a web-based reporting system known as the Business Keeper Monitoring System (BKMS) that guarantees a completely secure and anonymous reporting process," states EACC on its website.
BKMS reporting system keeps the whistleblower's identity hidden and their report confidential only to be accessed by EACC.
