Kenyans to receive personalized tax refunds directly through e-receipts

In an era marked by technological advancements, Treasury Cabinet Secretary, Njuguna Ndung’u, has unveiled a groundbreaking initiative set to transform the landscape of tax refunds.

The innovative approach centred around personalized reimbursements through electronic receipts obtained from supermarket purchases, heralds a significant departure from conventional compensation channels routed through companies.

Ndung’u, while underscoring the immense potential of this novel concept, lamented the missed opportunities thus far.

"We missed the boat somewhere. In this age of technology, we can decide that we are going to have personalised tax refunds through one’s receipts when we purchase things in the supermarket. Then we are going to compensate you directly and not through the firm," articulated Ndung’u, emphasizing the pivotal role of technology in streamlining tax procedures.

At the heart of this transformative endeavour lies the Electronic Tax Invoice Management System (eTIMS), slated for implementation with a looming deadline of March 31.

This system not only promises to revolutionize tax refunds but also aims to enhance efficiency and transparency within the taxation framework.

The recent introduction of eTIMS Lite by the Kenya Revenue Authority (KRA) marks a pivotal step towards inclusivity, particularly for players in the informal sector.

By extending the reach of electronic invoicing systems, the KRA aims to encompass a broader spectrum of businesses, fostering a more equitable tax ecosystem.

However, amidst these advancements, the KRA has revised its stance on exemptions, notably for farmers and small enterprises with turnovers below Sh5 million.

Contrary to previous exemptions, all businesses operating within Kenya are now mandated to electronically generate and transmit invoices, as per the regulations stipulated by the KRA.

“The following transactions shall be excluded from the requirement of an electronic tax invoice…supplies by a resident person whose annual turnover is less than five million shillings,” explained the KRA, delineating the parameters of the revised regulations.

Notably, transactions such as emoluments, imports, interest, airline passenger ticketing, accounting adjustments, fees charged by financial institutions, and services provided by foreigners without a permanent establishment in Kenya, fall under the purview of these regulations.

As Kenya charts a course towards modernizing its tax infrastructure, the paradigm shift towards personalized tax refunds marks a significant stride in aligning tax policies with contemporary technological capabilities.

With the deadline for eTIMS implementation fast approaching, stakeholders anticipate a transformative impact on tax administration, heralding a new era of efficiency and accountability.