As of January 1, 2024, all businesses operating in Kenya that were not registered for VAT but were registered for turnover tax, monthly rental income, partnerships, corporation tax, and individual income tax were expected to have onboarded the electronic tax invoice management system (eTIMS).

However, according to the Kenya Revenue Authority (KRA) officials, for the four, months, only 6,000 businesses had registered; this representing less than 1 percent of all registered businesses in the country.

The move has now pushed KRA to extend the deadline for the onboarding the eTIMS system from January 1 to March this year to increase its uptake.

Etims Chief Manager Hakamba Wangwe said: “There’s a bit of delay especially from the taxpayers who are not registered on VAT because as we speak as of December last year, we only have about 6,000. The data available to us on registered businesses, the ones that have a PIN, are about 663,000 entities that are expected to be on board by March 2024.”

“But then the information out there, when you look at the informal sector and when you look at businesses which are not registered for PIN, we’re projecting that the number could be upto 7 million customers.”

According to Hakamba, the uptake of the software that allows the taxman to monitor business transactions has remained low owing to suspicion.

Even as she insists that the authority is only interested in the visibility of the transactions, she blames the low uptake on the transition from a manual system to an automated system.

“The change aspect of this implementation is that they need to use the technology for tax purposes and just knowing that the taxman can see your transaction as you work day-by-day is a bit uncomfortable for some, but with technology again that’s the direction most businesses have gone,” she said.

As the government pushes to widen its tax bracket and increase tax revenue collections, experts warn that doing it too soon or too fast could be counterproductive.

Economist Churchill Ogutu said: “I don’t know how they will be able to enforce that even for a buyer your PIN is captured somewhere. These are some of the efforts that we’re seeing...there is some increased surveillance by the KRA to ensure that as time goes by they can widen the tax bracket.”

For KRA, the onboarding of businesses onto the eTIMS platform is for the greater good in as far as tax revenue collection goes.

But for a majority of the businesses that are being onboarded, they do not understand the system not its intended purpose.