Reduction for farmers, small companies after exemption from eTims invoices

Hakamba Wangwe, KRA chief supervisor for eTims. FILE PHOTO | DENNIS ONSONGO | NMG

The Kenya Income Authority (KRA) has excluded farmers and small companies from the requirement to supply digital invoices for his or her gross sales, providing them aid.

The brand new rules for the rollout of digital tax bill administration (eTims) have capped the edge of manufacturing an digital bill at Sh5 million, which implies a lot of the micro, small and medium enterprises (MSMEs) companies will likely be spared.

Provides by companies with an annual turnover of lower than Sh5 million are among the many 9 transactions which were exempted from the digital tax bill within the Tax Procedures (Digital Tax Bill) Laws, 2023.

“The next transactions shall be excluded from the requirement of an digital tax bill…provides by a resident individual whose annual turnover is lower than 5 million shillings,” reads the rules.

Different transactions are emoluments, imports, curiosity, and airline passenger ticketing.

Others are funding allowances together with inside accounting changes, charges charged by monetary establishments, and companies offered by a foreigner with no everlasting institution in Kenya.

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Nonetheless, the KRA advised the Enterprise Each day in an earlier interview that it had provide you with a brand new system that may assist the taxman monitor the inventory adjustments for small companies, particularly farmers who provide to co-operative societies.

Learn: KRA builds new system for SMEs after e-Tims uproar

Within the new system whose rollout is but to be accepted, reasonably than producing and transmitting digital invoices by eTims, small companies will solely present transactions.

Starting this month, all companies are required to supply an digital tax bill for all of the transactions they undertake, failure to which they can’t declare the expense when submitting for Earnings Tax.

In its new medium-term plan for elevating income, the Nationwide Treasury additionally plans to introduce a withholding tax of 5 % on farm produce bought to cooperative societies and agro-processors, in a bid to increase the tax base.

Loads of small companies, with a turnover of lower than Sh5 million yearly, or month-to-month gross sales of Sh416,000, are within the agricultural sector, which the federal government reckons has not been paid its fair proportion of taxes regardless of its excessive contribution to the financial system.