Government publishes new tax regulations to monitor business stocks
Government through the Ministry of Treasury moves to monitor people's business stocks in new tax regulations
Government through the Ministry of Treasury moves to monitor people’s business stocks in new tax regulations.
The businesses are the target of the Tax Procedures (Electronic Tax Invoice) Regulations and the Income Tax (Turnover Tax) Regulations, 2023, which were released on Thursday by Treasury Cabinet Secretary Njuguna Ndungu.
The Kenya Revenue Authority (KRA) would be able to keep an eye on enterprises’ inventories thanks to the new laws.
Notably, all companies will need to record every item they sell, along with the information on whether the product was imported or locally sourced.
“The taxpayer shall notify the Commissioner in writing within 30 days before the closure of business indicating records of current stock.
“In case there is transfer of stock upon closure of business, the taxpayer shall notify the Commissioner in writing the stock, quantity and their levels,” read the regulations in part.
On the other hand, the system will also produce invoices. The invoices must additionally include the serial number, the time and date of issuance, and the registered system user’s KRA PIN.
Together with the total gross amount and total tax amount, the buyer’s KRA PIN or other identifying information will be displayed.
“A person commits an offence if the person fails to comply with any provisions of these regulations or tampers, manipulates or interferes with the proper functioning of the system including uninstallation and change of the device without notifying the Commissioner,” read the regulations in part.
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Under the new regulations, businesses with an annual income between Ksh1 million to Ksh25 million will be liable to a turnover tax which is set at 3 percent.
Those exempted from these provisions include those with rental income, those with withholding tax as a final tax, and money generated from professional and training fees.
“Where the income from the business of a person registered under Regulation 7 exceeds Ksh25 million during a year of income, that person shall notify the Commissioner of the change of status,” read the proposals in part.
Late filing of the tax returns attracts a penalty of Ksh1,000 per month, while delays in paying the tax attract a penalty of 5 percent of the due tax.
Kenyans have been asked to submit their comments on the draft regulations to KRA by December 8.
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