What is eTims ? ,The New KRA Invoicing System in Kenya , Requirements , Benefits ,Sign Up and Installation

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June 1, 2024
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What is eTims ? ,The New KRA Invoicing System in Kenya , Requirements , Benefits ,Sign Up and Installation

Comprehensive Guide On How to Access the New KRA E-Tims System , Sign Up ,Requirements , Benefits and Implications

Table of Contents

  • Introduction: Embracing the New Era of Tax Management with eTIMS
  • What is eTIMS? Understanding the Electronic Tax Invoice Management System
  • Benefits of eTIMS for Kenyan Businesses
  • Eligibility Criteria: Who Needs to Use eTIMS?
  • Signing Up for eTIMS: A Step-by-Step Guide
  • Choosing the Right eTIMS Solution for Your Business Needs
    • eTIMS Lite (VAT)
      • Features and Functionality
      • Who Should Use eTIMS Lite (VAT)?
    • eTIMS Lite (Non-VAT)
      • Features and Functionality
      • Who Should Use eTIMS Lite (Non-VAT)?
    • eTIMS Multi-Paypoint
      • Features and Functionality
      • Who Should Use eTIMS Multi-Paypoint?
    • Third-Party Integration with eTIMS
  • Installing and Configuring eTIMS Software on Your Devices
    • Downloading eTIMS for Different Platforms
    • Installation Instructions for Each eTIMS Solution
  • Issuing Electronic Tax Invoices (ETIs) with eTIMS
    • Creating and Managing Sales Invoices
    • Sending ETIs to Customers Electronically
  • Additional Features and Functionalities of eTIMS
    • Stock Management (Limited Availability)
    • Inventory Tracking (Limited Availability)
    • Sales Reporting and Analytics
  • Compliance and Reporting with eTIMS
    • Automatic Generation of Tax Reports
    • Simplified Tax Filing with KRA
  • Support and Resources for eTIMS Users

Introduction: Embracing the New Era of Tax Management with eTIMS

The Kenya Revenue Authority (KRA) has ushered in a new era of streamlined tax management with the introduction of the Electronic Tax Invoice Management System (eTIMS). This innovative system aims to revolutionize the way businesses issue invoices, manage sales data, and interact with the KRA for tax compliance purposes.

This comprehensive guide will equip you with all the essential knowledge to navigate the eTIMS system effectively. Whether you’re a seasoned business owner or just starting, eTIMS offers a user-friendly platform to simplify your tax administration and ensure regulatory compliance.

What is eTIMS? Understanding the Electronic Tax Invoice Management System

eTIMS is a secure, web-based system developed by the KRA to facilitate the issuance, transmission, and storage of electronic tax invoices (ETIs). These digital invoices serve as official receipts for taxable transactions, replacing traditional paper invoices.

The system offers a myriad of benefits for both businesses and the KRA, fostering transparency and efficiency in tax administration.

Benefits of eTIMS for Kenyan Businesses

  • Enhanced Efficiency: Streamlined invoice creation, transmission, and record-keeping processes.
  • Reduced Costs: Saves time and resources associated with printing, distributing, and storing paper invoices.
  • Improved Cash Flow: Faster invoice processing and customer payments.
  • Reduced Errors: Minimizes errors associated with manual invoice creation and data entry.
  • Simplified Tax Compliance: Automatic generation of tax reports and seamless filing with the KRA.
  • Enhanced Security: Secure storage and transmission of ETIs with tamper-proof digital signatures.
  • Real-Time Sales Data: Access to valuable sales data and insights for informed business decisions.

Eligibility Criteria: Who Needs to Use eTIMS?

The Kenyan government has implemented a phased approach to eTIMS adoption. Currently, the system is mandatory for the following businesses:

Signing Up for eTIMS: A Step-by-Step Guide

Transitioning to eTIMS involves a user-friendly registration process. Here’s a detailed guide to navigate the system:

Pre-Requisites for eTIMS Registration

Before embarking on the eTIMS registration journey, ensure you have the following in place:

  • Valid KRA PIN: Every business must possess a valid Kenya Revenue Authority Personal Identification Number (PIN) to register for eTIMS. You can apply for a KRA PIN online if you haven’t already (https://www.kra.go.ke/services/apply-for-pin).
  • iTax Account: An active iTax account serves as your gateway to various KRA services, including eTIMS registration. Register for an iTax account if you haven’t done so already ([invalid URL removed]).
  • Digital Certificates (Optional): While not mandatory for basic eTIMS functionalities, obtaining digital certificates allows for advanced features like digital signing of invoices. You can acquire digital certificates from authorized providers approved by the KRA.

The eTIMS Onboarding Process

Here’s a breakdown of the eTIMS registration process:

Step 1: Accessing the eTIMS Taxpayer Portal

Step 2: Sign Up and User Creation

  • Click on the “Sign Up” button on the eTIMS homepage.
  • Enter your valid KRA PIN in the designated field.
  • Upon entering your PIN, you will receive a One-Time Password (OTP) via SMS to your iTax registered mobile number.
  • Enter the received OTP in the designated field on the eTIMS portal.
  • Create a strong password for your eTIMS account, adhering to password security best practices.
  • Review and agree to the eTIMS terms and conditions.

Step 3: Selecting Your eTIMS Solution

  • Once logged in, you’ll be presented with a menu of available eTIMS solutions.
  • The KRA offers various eTIMS solutions tailored to different business needs and sizes. We’ll delve deeper into these options in the following section.

Step 4: Uploading Required Documents

  • Depending on your chosen eTIMS solution, you might be required to upload specific documents for verification.
  • These documents typically include:
    • Copy of your Certificate of Incorporation (CR1) for companies or Partnership Deed for partnerships.
    • Copy of your National ID or Passport for individual business owners.
    • An introductory letter (if applicable) outlining the appointment of a tax representative to manage your eTIMS account on your behalf.

Step 5: Awaiting Approval and System Activation

  • After submitting your application and necessary documents, the KRA will review your information for approval.
  • This process typically takes 1-2 business days.
  • Upon approval, you will receive a notification and your chosen eTIMS solution will be activated for your use.

Choosing the Right eTIMS Solution for Your Business Needs

The KRA offers a variety of eTIMS solutions catering to different business sizes and functionalities. Here’s a breakdown of the available options to help you select the most suitable one for your enterprise:

eTIMS Lite (VAT)

Features and Functionality:

  • Ideal for VAT-registered businesses with a limited number of transactions.
  • Allows for the creation and issuance of basic electronic tax invoices (ETIs).
  • Generates basic sales reports with VAT summaries.
  • Offers downloadable software for offline invoice creation and management.
  • Integrates seamlessly with the iTax platform for simplified tax filing.

Who Should Use eTIMS Lite (VAT)?

  • Small and medium-sized businesses (SMBs) registered for VAT with a low-to-medium transaction volume.
  • Startups or new businesses venturing into the VAT bracket.
  • Businesses with basic invoicing needs and limited IT infrastructure.

eTIMS Lite (Non-VAT)

Features and Functionality:

  • Designed for non-VAT registered businesses with a low transaction volume.
  • Enables the creation and issuance of electronic invoices without VAT calculations.
  • Offers basic sales reports for non-VAT transactions.
  • Includes downloadable software for offline invoice creation and management.
  • Ensures compliance with relevant tax regulations for non-VAT registered entities.

Who Should Use eTIMS Lite (Non-VAT)?

  • Small businesses or sole proprietorships not registered for VAT with limited invoicing requirements.
  • Freelancers or independent contractors who need to issue professional invoices.
  • Businesses operating in sectors exempted from VAT.

Note: Both eTIMS Lite (VAT) and eTIMS Lite (Non-VAT) have limitations in terms of features and functionalities. These solutions are suitable for basic invoicing needs but might not be ideal for businesses with complex inventory management, advanced reporting requirements, or a high transaction volume.

eTIMS Multi-Paypoint

Features and Functionality:

  • A more robust solution tailored for businesses with multiple branches or sales outlets (pay points).
  • Enables centralized invoice creation and management from a single platform.
  • Offers real-time sales data tracking across all branches.
  • Provides advanced sales reporting and analytics capabilities.
  • Integrates seamlessly with existing accounting or inventory management software (third-party integration might require additional setup).

Who Should Use eTIMS Multi-Paypoint?

  • Retail chains or businesses with multiple physical locations.
  • Wholesale distributors or businesses with a high volume of sales transactions.
  • Businesses requiring advanced inventory management and sales data insights.
  • Companies seeking centralized control over invoicing and sales data across branches.

Additional Consideration: Third-Party Integration with eTIMS

For businesses with existing accounting software or complex inventory management needs, eTIMS offers the option of integrating with third-party applications. This allows for seamless data exchange between your existing systems and eTIMS, streamlining your invoicing and sales data management processes.

However, it’s important to note that:

  • Third-party integration typically requires additional technical expertise or might involve costs for acquiring compatible software.
  • Businesses should ensure the chosen third-party software is compatible with eTIMS and approved by the KRA.

Installing and Configuring eTIMS Software on Your Devices

Once you’ve chosen and activated your eTIMS solution, you can proceed with installing the software on your devices (if applicable) for offline invoice creation and management. Here’s a breakdown of the download and installation process for each solution:

Downloading eTIMS for Different Platforms

The eTIMS software is available for download on various platforms, allowing you to manage invoices on your desktop computers or laptops.

  • Downloading eTIMS Lite (VAT) and eTIMS Lite (Non-VAT):
    • Navigate to the “Downloads” section within your eTIMS user dashboard.
    • The platform will offer downloadable software for Windows and macOS operating systems.
    • Download the installer file compatible with your operating system.
  • Downloading eTIMS Multi-Paypoint:
    • Due to its more complex nature, eTIMS Multi-Paypoint typically requires server-side installation.
    • Consult the eTIMS user manual or contact the KRA Help Desk for specific installation instructions for eTIMS Multi-Paypoint.

Installation Instructions for Each eTIMS Solution

eTIMS Lite (VAT) and eTIMS Lite (Non-VAT):

  1. Once downloaded, double-click the installer file to initiate the installation process.
  2. Follow the on-screen instructions provided by the eTIMS installation wizard.
  3. During installation, you will be prompted to enter your eTIMS login credentials (KRA PIN and password).
  4. The installation process will typically configure the software to connect with the eTIMS server securely.

eTIMS Multi-Paypoint:

As mentioned earlier, server-side installation for eTIMS Multi-Paypoint might require assistance from your IT team or a qualified technician. The KRA website or user manuals might offer general guidelines, but specific configuration steps may vary depending on your server environment.

Important Note:

  • Always ensure you download the eTIMS software from the official KRA website (https://etims.kra.go.ke/) to avoid security risks associated with downloading from untrusted sources.
  • Maintain a secure internet connection during the download and installation process.
  • Keep your eTIMS software updated with the latest versions to ensure optimal functionality and security.

Issuing Electronic Tax Invoices (ETIs) with eTIMS

Once your eTIMS solution is up and running, you can begin creating and issuing electronic tax invoices (ETIs) to your customers. Here’s a basic overview of the process:

Creating and Managing Sales Invoices

  • Access your eTIMS user dashboard through the web portal or downloaded software.
  • The platform will provide an interface for creating new invoices.
  • Enter essential invoice details such as customer information, product or service descriptions, quantities, unit prices, and any applicable taxes (VAT for VAT-registered businesses).
  • eTIMS offers functionalities to manage product or service catalogs for faster invoice creation.
  • You can preview the invoice before finalizing and sending it to your customer.

Sending ETIs to Customers Electronically

  • eTIMS provides several options for sending ETIs to your customers:
    • Email: Attach the generated electronic invoice PDF to an email and send it to your customer’s registered email address.
    • SMS: Some eTIMS solutions allow sending a download link for the ETI via SMS to the customer’s mobile phone number.
    • QR Code: The platform might generate a QR code that your customer can scan to download the ETI.

Benefits of Electronic Invoices:

  • Secure and tamper-proof digital format.
  • Faster and more efficient delivery compared to paper invoices.
  • Reduced costs associated with printing and mailing physical invoices.
  • Easier record-keeping and retrieval of past invoices for both businesses and customers.

Additional Features and Functionalities of eTIMS

While the core functionality revolves around creating and issuing ETIs, eTIMS offers additional features that can enhance your business processes:

Stock Management (Limited Availability): (Available in some eTIMS Multi-Paypoint configurations)

  • Certain eTIMS Multi-Paypoint configurations offer basic stock management functionalities.
  • You can maintain a digital inventory of your products or services within the eTIMS system.
  • Track stock levels and receive alerts when inventory reaches predefined thresholds.

Inventory Tracking (Limited Availability): (Available in some eTIMS Multi-Paypoint configurations)

  • Similar to stock management, some eTIMS Multi-Paypoint versions allow basic inventory tracking capabilities.
  • Monitor inventory movement, including sales, purchases, and adjustments.
  • Gain insights

Sales Reporting and Analytics:

  • eTIMS generates comprehensive sales reports based on your issued ETIs.
  • These reports provide valuable insights into your sales performance, including:
    • Total sales volume by product or service category.
    • Sales trends over time.
    • Customer purchase behavior analysis.
    • Tax summaries for VAT-registered businesses.
  • Utilize these reports to make informed business decisions regarding product offerings, marketing strategies, and resource allocation.

Compliance and Reporting with eTIMS

One of the significant advantages of eTIMS is its streamlined approach to tax compliance. Here’s how the system simplifies tax administration for businesses:

Automatic Generation of Tax Reports:

  • eTIMS automatically generates tax reports based on your issued ETIs.
  • These reports encompass:
    • VAT summaries (for VAT-registered businesses)
    • Withholding tax reports (if applicable)
    • Sales reports categorized by tax brackets

Simplified Tax Filing with the KRA:

  • The generated tax reports can be directly uploaded to the iTax platform for simplified tax filing.
  • eTIMS eliminates the need for manual data entry and reduces the risk of errors during tax filing.

Enhanced Transparency and Audit Trail:

  • eTIMS maintains a secure digital record of all issued ETIs and related data.
  • This digital audit trail fosters transparency and simplifies tax audits conducted by the KRA.

Support and Resources for eTIMS Users

The KRA offers various resources and support channels to assist businesses using eTIMS:

KRA eTIMS Help Desk Contact Information:

  • For technical assistance or troubleshooting issues with eTIMS, you can contact the KRA eTIMS Help Desk through the following channels:

KRA eTIMS FAQs Section:

  • The KRA website features a comprehensive eTIMS Frequently Asked Questions (FAQs) section (https://etims.kra.go.ke/).
  • This section addresses common queries and provides step-by-step instructions for various eTIMS functionalities.
  • Explore the FAQs section to find answers to your questions before contacting the Help Desk.

Additional Resources:

  • The KRA website offers downloadable user manuals and guides for each eTIMS solution (https://etims.kra.go.ke/).
  • Consider attending KRA-organized workshops or webinars on eTIMS to gain a deeper understanding of the system and its functionalities.
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