As the deadline for the installation of the upgraded electronic tax registers (ETRs) machines approaches, manufacturers and traders risk a Sh1 million fine or a jail term of three years for failure to install it. The new ETR machine is expected to grant the taxman real-time access to their invoices.

KRA will require businesses to buy and deploy the new Internet-enabled ETRs that track invoicing at every turn of a transaction to assess the tax dues promptly by July 31. However, this will come as an extra cost to doing business since businesses will be forced to bear the cost of procuring the gadgets.

KRA which has approved 16 suppliers to sell the upgraded ETRs said there are enough stocks for the gadgets in the country. Suppliers have indicated that they are recording booming business amid the scramble to comply by Kenyan firms. The new ETR will upgrade the current manual tax registers that store sales data for scrutiny by the KRA after 30 days.

The new ETRs will be connected through the Internet to KRA’s systems allowing it to monitor all transactions in the traders’ Point of Sale and invoicing systems.

Hakamba Wangwe the chief manager in charge of Tax Invoice Management System (TIMS) , had this to say, “If a VAT registered taxpayer does not comply within the specified period then we invoke section 53 of the VAT Act which says that you will either be fined Sh1 million or three years imprisonment or both if you don’t comply within the specified timeline.”