Kenya Revenue Authority (KRA) introduced eTIMS (Electronic Tax Invoice Management System) to streamline the process. This guide breaks down what eTIMS is, how it works, and why it’s crucial for your business.
What is eTIMS?
eTIMS is a digital tax invoice system mandated by the KRA. It allows businesses to create and send KRA-compliant invoices electronically. Think of it as a modern, digital upgrade to traditional invoicing. Instead of paper invoices, eTIMS invoices are generated through the online eTIMS portal or via software installed on your devices, including laptops, Android PDAs, smartphones, or desktop computers.
How Does eTIMS Work?
eTIMS invoices function similarly to regular invoices, serving as a payment request after goods or services are provided. The key difference lies in real-time data sharing. When you issue an eTIMS invoice, the KRA is immediately notified of the transaction, including the tax details of both the sender and the recipient. This real-time visibility is a game-changer for tax compliance.
eTIMS: A Taxable Invoice Advantage
eTIMS invoices act as official taxable invoices. This means that when you receive an eTIMS invoice for a purchase, the KRA automatically recognizes your expenditure when you file your tax returns. This simplifies the tax filing process and reduces the risk of discrepancies.
Accessing eTIMS: Free and Accessible
The KRA provides eTIMS free of charge. This accessibility ensures that businesses of all sizes can comply. For added convenience, there’s even eTIMS Lite, accessible through the eTIMS USSD code *222# or via your eCitizen account.
Why eTIMS? Benefits for the KRA and Your Business
The KRA implemented eTIMS to increase transaction transparency, broaden the tax base, and ultimately boost revenue collection. For businesses, eTIMS offers several advantages:
- Improved Tax Compliance: eTIMS ensures accurate record-keeping and reduces the risk of errors in tax reporting.
- Streamlined Tax Filing: Automated data sharing simplifies the tax filing process.
- Enhanced Transparency: eTIMS promotes transparency in business transactions.
- Reduced Paperwork: Digital invoicing reduces the need for physical paperwork, saving time and resources.
This guide will break down the eTIMS registration process and the different solutions available, empowering your business to comply efficiently.
eTIMS Registration
- Head over to the eTIMS website .
- Create your account using your KRA PIN.
- Choose the eTIMS solution that fits your business as explained in the options below.
- Apply for your chosen solution.
Which eTIMS Solution is Right for Your Business?
KRA understands that businesses come in all shapes and sizes. That’s why they’ve developed different eTIMS solutions.
1. eTIMS Lite: Perfect for Small Businesses and Jua Kali
eTIMS Lite is designed with small businesses and Jua Kali traders in mind. It’s so simple, you can even use it on a basic feature phone (kabambe). eTIMS Lite is designed for small and micro taxpayers who are not VAT registered. You can’t have another active eTIMS solution to use this. It’s suitable for businesses selling goods, services, or both.
- eTIMS Lite (Web – eCitizen): Access via ecitizen.kra.go.ke. Ideal for businesses with occasional internet access.
- *eTIMS Lite (USSD – 222#): A mobile-based solution accessible through *222#. Perfect for businesses without internet access.
2. eTIMS Client (Windows, Android Tablet, and PDA): For Businesses with No Invoicing System
eTIMS Client is for businesses selling goods, services, or both, and without an existing invoicing system.
- eTIMS Client (Windows): Requires a Windows PC (version 10.0.17 and above) with at least 2GB RAM and 20GB storage. Not compatible with Mac computers.
- eTIMS Client (Android): Suitable for small and micro businesses in the service sector (no stock management). Requires an Android smartphone/tablet/PDA with Android 8.0 or above and 8GB+ internal storage.
3. eTIMS Online Portal: For Small Service Providers
The eTIMS Online Portal is designed for service-only businesses that issue no more than 10 invoices per month. It’s a web-based portal accessible through any internet browser.
Quick Tip: Finding Your Device’s Serial and Model Number (For eTIMS Client)
Here’s how to find the info you need for your eTIMS Client application:
- Serial Number (Windows): Open PowerShell and type “WMIC bios get serial number”.
- Model Name (Windows): Open System Information. Look for “System Model.”
4. eTIMS Integration: Seamless for Businesses with Existing Systems (Automate Your Invoicing)
Using accounting software or an ERP? eTIMS integration is the most efficient way to go. Connect your existing system and automate your eTIMS compliance. If you already have an invoicing system, integration with eTIMS is facilitated through an Online Sales Control Unit (OSCU) or Virtual Sales Control Unit (VSCU). VSCU is ideal for businesses with bulk invoicing needs and systems that don’t always operate online. Integration is done through approved third-party integrators (listed on the KRA website), or you can opt for self-integration.
How to Generate eTIMS Invoices Using USSD (222#)
Access KRA Services: Dial *222# on your phone.
- Select Tax Payment (KRA): Choose option 5 for “Tax Payment (KRA)” and send.
- Sales Invoice: Select option 2 for “Sales Invoice” and send.
- Enter ID Number: Enter your National ID number and send.
- Enter Year of Birth: Enter your year of birth and confirm. If incorrect, you’ll be prompted to try again.
- Terms and Conditions: New users must select 1 to register for eTIMS.
- Registration: After successful registration, you’ll receive a confirmation message. You’ll also receive a confirmation message upon successful PIN registration.
- Access Sales Invoice Service: Select 2 to access the sales invoice service.
- Customer Details: Enter the customer’s name/PIN/customer number.
- Product/Service Name: Enter the product/service name.
- Quantity: Enter the quantity and send.
- Price per Item: Enter the price per item and send.
- Confirm Invoice Details: You’ll receive a message confirming the details (your name, customer number, product/service, quantity, unit price, and total). Select 1 to confirm.
- Invoice Creation Confirmation: You’ll receive an SMS confirming the invoice creation.
- Invoice Number and Link: The SMS will contain the invoice number and a link to the invoice template.
- View and Download Invoice: Clicking the link will redirect you to the invoice template. Click “Download” to save the invoice.
How to Generate an eTIMS Credit Note Using USSD (222#)
- Access KRA Services: Dial *222# on your phone.
- Select Credit Note: Choose option 3 for “Credit Note.”
- Enter eTIMS Invoice Number: Enter the eTIMS invoice number (e.g., KRASRN000000225/1).
- Confirm Credit Note Details: You’ll receive a message with the invoice number and total amount, prompting you to select 1 to confirm or 0 to go back.
- Credit Note Confirmation: You’ll receive an SMS confirming the credit note creation.
- Credit Note Link: The SMS will contain a link to the credit note template.
- View and Download Credit Note: Clicking the link will redirect you to the credit note template. Click “Download” to save it.
Tips for Using USSD eTIMS:
- Accuracy is Key: Double-check all entered information (ID number, year of birth, customer details, product/service details, quantity, price) before confirming.
- Save Confirmation Messages: Keep the confirmation SMS messages for your records.
eTIMS Integration Costs and Setting up after installation.
eTIMS integration costs in Kenya can range from Ksh 50,000 to hundreds of thousands. It depends on the complexity of your business systems. Integrators consider several key factors when preparing a quote:
- Your ERP/POS System: The type of Enterprise Resource Planning (ERP) or Point-of-Sale (POS) system you use plays a significant role. Some systems are easier to integrate with eTIMS than others.
- Number of Users: The more users who need access to the integrated system, the higher the cost might be.
- Invoicing Points: The number of locations or devices from which you generate invoices will also be a factor.
- Database: The software used to run your database and whether it’s shared or standalone can influence the integration complexity.
- API Availability: If your systems have existing APIs for retrieving data (like sales transactions), integration can be smoother and potentially less expensive.
- Control Unit Devices: The number of devices hosting your ERP/POS system can affect the integration scope.
- Online/Offline Status: Whether your ERP/POS operates online or offline impacts how the integration is handled.
- Number of Branches: Businesses with multiple branches will likely have higher integration costs.
- Available Modules: The specific modules you need to integrate can also influence the price.
Software developer looking to offer eTIMS integrations
Are you a software developer looking to offer eTIMS integration to your clients? It’s important to note that only KRA-approved integrators can perform eTIMS integrations. If you’re not an approved integrator, you’ll need to partner with one. This partnership can be mutually beneficial, as you can offer a complete solution to your clients while the approved integrator handles the technical integration. The fees for this collaboration can often be negotiated based on the volume of clients you bring.
What You Need to Know After eTIMS Installation
Once your chosen eTIMS solution is installed, there are a few essential steps to take:
- Setting Up Login Details: Whether it’s eTIMS Online (using your signup credentials) or eTIMS Client (creating a new user), make sure you understand the login process.
- Adding Products: You can’t create invoices without adding your products to eTIMS. This can be straightforward for eTIMS Online, but eTIMS Client might require assistance from a KRA station, particularly with product codes.
- Generating and Downloading Invoices (ETRs): Learn how to generate and download Electronic Tax Invoices (ETRs) in your chosen eTIMS system. Both eTIMS Online and Client have options under the “Transaction Management” menu.
- Generating Credit Notes: Understand how to generate credit notes for corrections or returns.
- Printer Connection (eTIMS Client): If using eTIMS Client and you want to print invoices, ensure your printer is correctly set up. For PDF downloads, you might need to set “Print to PDF” as your default printer.
What if I lose or damage my registered eTIMS device?
If you’re using eTIMS Client (the software installed on a device like a laptop or smartphone), losing or damaging that device requires you to visit your KRA station. You’ll need to apply for a change of device, which involves a tax compliance assessment and answering questions from KRA agents. After approval, they’ll assist you in registering a new device.
How do I install eTIMS on my laptop?
- Download the eTIMS Client software.
- Fill out the eTIMS commitment form.
- Apply via the eTIMS website. You’ll need to sign up or log in.
- If approved, you’ll receive a confirmation SMS with one-time login details. Use these to create a user account.
Troubleshooting eTIMS Installation:
- Outdated phone number: Update your phone number on the KRA iTax platform and migrate it to the eTIMS database.
- Missing details: Submit a data migration request to KRA if your details are missing from eTIMS.
For registration challenges, visit a KRA office.
Answered questions about eTIMS.
How do I make a sale on eTIMS?
- eTIMS Online: Log in, go to “Sales Receipt” under “Sales Management,” click “Add,” and fill in the sales details.
Who is exempt from eTIMS in Kenya?
No one is exempt from eTIMS. It’s mandatory for all businesses to generate invoices through eTIMS. However, some business costs don’t require eTIMS invoices, such as emoluments, imports, investment allowances, interest, and air passenger ticketing.
How do I log in to my eTIMS account?
Visit the eTIMS website and enter your KRA PIN and password. Companies use their company’s KRA PIN.
How do I register for ETR?
ETR (Electronic Tax Receipt) refers to sales receipts from thermal printers connected to TIMS devices (the predecessor to eTIMS). With eTIMS, you register for ETR by choosing the appropriate eTIMS solution.
How do I generate an ETR on eTIMS?
Generate a sales receipt (invoice) and download it. For eTIMS Client with a thermal printer, configure your printer.
How do I file VAT returns on eTIMS?
eTIMS prepopulates VAT returns. Ensure your KRA PIN is captured on all eTIMS sales receipts (ETRs) you receive from suppliers for input VAT claims. When filing monthly VAT on iTax, the Excel sheets will be prepopulated with data from your suppliers’ eTIMS/TIMS transmissions. Verify the validity of eTIMS invoices you receive.
How do I confirm the validity of an eTIMS invoice?
- QR Code: Scan the QR code on the invoice. A valid invoice will direct you to a KRA page with transaction details.
- Invoice Number: Copy the invoice number (e.g., KRACU0564754176/2), go to the iTax KRA platform’s invoice number checker, paste the number, and validate it.
Where do I get eTIMS in Kenya?
Download eTIMS from the official KRA website. It’s free.
What are the minimum requirements for eTIMS?
- You must be a business that issues invoices.
- eTIMS Client (Computer): Windows OS, 2GB RAM, 20GB free hard disk space.
- eTIMS Client (Android): Android 8 or higher, 8GB+ internal storage.
Who is eligible for eTIMS in Kenya?
All businesses in Kenya that issue invoices are eligible and required to use eTIMS.
What is the difference between eTIMS and TIMS?
TIMS (Tax Invoice Management System) was the previous system, requiring businesses to purchase costly TIMS devices. eTIMS is more accessible, offering various solutions (including free software) and eliminating the need for specialized hardware.
Still have questions? Luvisia Digital can help you navigate eTIMS. Contact us today for a consultation.
Luvisia Digital is your eTIMS Helper
Luvisia Digital offers expert support and guidance to help you choose the right eTIMS solution, complete your registration, and integrate with your existing systems. Contact us today for a free consultation and let us take the stress out of eTIMS compliance.