The Kenya Revenue Authority (KRA) has reversed its initial decision to exempt small businesses and farmers from using the electronic tax invoice management system (eTims).

This announcement comes alongside the launch of a simplified eTims solution named "eTims Lite" designed specifically for non-VAT registered taxpayers.

In a public notice, KRA emphasized, "all persons carrying on business including those in the informal sector and small businesses are required to electronically generate and transmit their invoices to KRA via the eTims system."

This policy shift suggests a below-average adoption rate for eTims, particularly amongst the informal sector businesses targeted by the initiative.

Previously, the Tax Procedures (Electronic Tax Invoice) Regulations, introduced in 2023, exempted businesses with a yearly turnover below Sh5 million from generating electronic invoices.

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This exemption offered a sigh of relief for many small-scale enterprises and farmers.

However, the recent announcement nullifies this exemption.

The new eTims Lite platform aims to address potential compliance hurdles for smaller businesses.

Accessible through both the eCitizen platform and a USSD code (*222#), eTims Lite offers a more user-friendly experience for non-VAT registered taxpayers.

The mandatory eTims onboarding deadline remains set for March 31st, 2024.

This deadline urgency underscores KRA's commitment to improve tax collection and transparency. Businesses failing to comply risk being unable to claim certain expenses during income tax filing.

While KRA initially indicated a less stringent approach for smaller enterprises in December 2023, this latest development signifies a stricter stance on electronic invoicing for all businesses operating within Kenya.