ISO 9001:2008 CERTIFIED
DOMESTIC TAXES DEPARTMENT
2011 / 2012
ELECTRONIC TAX REGISTER
SYSTEM AT A GLANCE
“Do you love Kenya?
Ask for a fiscal receipt”
“To comply is always cheaper than not to comply”
1.
What is Fiscalization?
This is the enactment of special laws to make it obligatory for any person
who sells goods or services to consumers to use approved tax registers and
other devices that have fiscal memory to issue sales documents. This
provides a reliable means for The Authority to check the total sales and tax
payable by individual taxpayer
2.
What is a fiscal memory?
A fiscal memory is special Read Only Memory (ROM) built into the tax
register to store sales and tax information at the time of sale. The
information is stored permanently for at least five (5) years.
3.
Legal framework
The requirement for taxpayers to use ETR was introduced in the Budget of FY
2004. The Finance Act made the following amendments to the VAT Act:
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The Seventh Schedule to the VAT Act was amended to empower the
Commissioner to require any person to use an Electronic Tax Register
of such type and description as may be prescribed for the purpose of
assessing information/transactions, which may affect his tax liability.
The same schedule was also amended to provide for recovery of the
full costs of the electronic tax register from the tax payable by the tax
payer who purchased the register.
The Eighth Schedule to the VAT Act was amended in PART B by
introduction of Item 28 which zero rates (exempts) VAT on purchase or
importation of ETRs purchased prior to 30th June 2006.
The type and description of the ETRs to be used have been prescribed in
Legal Notice No. 110 of 8th October 2004 entitled “THE VALUE
ADDED TAX (ELECTRONIC TAX REGISTERS) REGULATIONS 2004”.
The same Legal Notice specifies that “Any person who fails to comply
with these Regulations shall be guilty of an offence and shall be liable to
a fine not exceeding five hundred thousand shillings or to
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imprisonment for a term not exceeding three years or to both.”
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Legal Notice No. 54 of June 16, 2006 requires that all
invoices/receipts for input tax claim must be ETR generated.
With effect from 12/06/2010, a supplier of goods and services on
credit is required to issue a tax invoice immediately at the time of
delivery or sale and not within 14 days as before.
4.
What is an Electronic Cash Register (ECR)?
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Electronic Cash Register is a device used by traders to record sales and
issue receipts.
It also stores information such as sales, stocks, and can also issue
reports e.g. daily sales, monthly and annual sales.
Electronic Cash Registers have been in use by taxpayers for a long time.
5.
What is an Electronic Tax Register (ETR)?
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Electronic Tax Register (ETR) is a Cash Register but with Fiscal Memory.
Because of the fiscal memory, ETR is also known as Fiscal Cash Register
(FCR).
ETR has several other special security features including:
- Laden or Epoxy resin seal.
- Special software specifications.
- Disconnection/reconnection report.
- Self enforcing daily report.
- Special password for user
All essential data such as the totals of each tax category and the total
turn-over for each day are permanently stored in the fiscal memory.
Each tax register has a unique register identification number securely
written in the fiscal memory and assigned to the owner of the tax
register when he buys it.
ETR is mostly used as stand alone but sometimes it can be configured
into a computer network.
ETR can be programmed with PRICE LOOK UP (PLU) so that sales are
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made by keying in product codes or by use of bar code scanner or be
left open so that prices are keyed in at the time of sale.
ETR can be programmed with stock records so that stock levels are
updated automatically as sales are made.
Other Fiscalized Electronic Devices (FED)
6.1 Electronic Tax Printer
An electronic tax printer is a printer that is connected in a computer network
to store every sales transaction in its fiscal memory while it issues receipts to
customers. It is basically similar to printers that are currently being used in
shops, supermarkets, except for the fiscal memory.
6.2 Special Secure Fiscal Device for Record Signing (SSFDRS) or
Electronic Signature Device (ESD)
This is a record- signing device that is suitable for taxpayers who have
computerised accounting systems that issue letter-headed (pre-printed)
invoices. This device uses a special computer programme to generate a
unique number using the details of the sale including the name of the
purchaser, goods sold, quantity sold, date of sale, time of sale etc. It issues
this number to the computer at the time of issuance of invoice so that it is
printed at the end of the invoice. The number is unique in that no two
numbers can be similar. This makes it easy to distinguish between authentic
and fake invoices. In addition the number is permanently stored in the
device for audit purposes against the copies of the invoices stored in the
computer system.
7.
Documents generated by Electronic Tax
Register, and other Fiscalised Devises
7.1. Transaction Receipt
This is the receipt printed in respect of each sale as it occurs. Such receipts
printed from a register shall contain:(i) the name and address of the user of the register;
(ii) the VAT number of the user of the register;
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(iii) the personal identification number (PIN) of the user of the register;
(iv) the unique identification number of the register;
(v) Identity of supply, quantity, unit price, tax rate chargeable, and total
value of the sale;
(vi) the tax amount payable;
(vii) the date and time of issue of the receipt;
(viii) the total amount payable, inclusive of tax;
7.2. Daily Report
Approved Electronic Tax Registers must be designed to generate summary
of transactions made each day by tax rate. This is called “Z reports” and
must be used daily even if no transaction has taken place.
7.3 Monthly Report
This report contains a summary of daily sales for the month's transactions by
tax rates (Monthly Z-Report).
7.4 Annual Report
This is a summary of monthly sales for the year.
7.5 Other Reports
Fiscalized devices can issue sales reports for any period required by the user
provided that the sales were recorded using that same device (Periodic Zreport).
8.
Types of Fiscal Electronic Devices to be used by Taxpayers
8.1 Electronic Signature Device [ESD]
A taxpayer who uses a computerized accounting system to issue financial
documents such as invoices and transport documents needs to fiscalize the
procedure by the use of ESD only.
8.2 Electronic Tax Printer [FP]
A taxpayer who uses a computerized accounting system to issue exclusively
retail receipts (cash sales) is not obliged to use ESD. He can use Electronic
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Tax Printer. He may, however, be required to use ESD instead if the
Commissioner finds it necessary.
A taxpayer who issues both retail receipts and invoices using computerized
accounting system has to use Electronic Printer for retail receipts & ESD for
invoices & other accounting documents.
8.3 Electronic Tax Register [ETR]
A taxpayer who issues only hand written retail receipts shall use ETR to
generate cash sale receipts.
A taxpayer issuing hand written financial documents will be required to issue
receipts using ETR to be attached to the hand written invoice.
9.
Roles of Key stake holders in the ETR System
9.1 Taxpayers
• To ensure that sales are made through electronic tax register.
• To ensure that each customer leaves his premises with a fiscal receipt.
• To keep daily, monthly and annual reports.
• To submit VAT returns based on the fiscal documents.
• To maintain a ledger for repair and maintenance of the device.
• To report to the Authority any one not using ETR to sell
9.2 Suppliers
• To work with KRA to ensure that their models fulfil the requirements of
the VAT Act.
• To provide the right ETRs to taxpayers and ensure they are installed.
• Work with KRA to improve the system through innovation.
• To train taxpayers on the usage of ETRs.
• Ensure continuity of the model by maintaining ceaseless backups.
• Work with KRA to identify offenders.
9.3 Staff
• To enforce issuance of fiscal receipts.
• To educate public on the usage of ETR
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To identify, educating and prosecuting perpetrators.
To audit and inspecting functionalities of fiscalised devices.
To suggest potential improvements.
10. Advantages of ETR and other fiscalised devices
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Improve record keeping by taxpayers and Minimize theft by servants in
shops.
Reduce cost of maintenance of records by taxpayers since daily,
monthly and annual report will automatically be produced by ETR.
Authenticate documents for tax and other purposes.
Reduce tax audit period and paperwork for taxpayer and tax auditors.
Reduce fraudulent accounting and hence improve tax revenue.
Improve management of business through electronic connectivity.
11. Implementation and cost
Taxpayers, who purchased and installed the ETRs prior to 31st December,
2006 were allowed to deduct the cost in their monthly VAT tax returns after
ETR purchase and installation documents approval by KRA.
12. Compulsory ETR Device Registration
Register all your ETR Devices by submitting the following ETR purchase and
installation documents with copies to the nearest KRA – Domestic Taxes
Offices:
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Invoice
Delivery Note
Job Card or Installation sheet
1st Z-report (Z-report No.1)
The documents will be endorsed and data will be captured into KRA system
noting ETR Compliance.
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13. Breakdowns
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A taxpayer whose device breaks down is required to notify the
Commissioner and their Supplier within 48 hours in writing.
The device should be repaired by Supplier and be operational within
48 hours of notification.
During repair period Supplier will use standby fiscal devices only in the
absence of other fiscal devices or standbys can an alternative system be
used and a proper trail of transactions maintained.
14. Online Filling
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Submission of VAT3 returns is now online, VAT C which is an
attachment to the return captures among other details the information
contained in the Z report.
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15. List of Approved ETR Suppliers
1.
Petken Limited
Bruce Hse, Nairobi, Tel: 20 - 241811/22/23
Box 46200 - 00100
2.
Copy Cat Limited
Kijabe Street, Nairobi, Tel: 20 - 226701
Box 49872 - 00100
3.
Advatech Office
Supplies Ltd
Soin Arcade, Westlands, Nairobi
Tel: 20 - 722-516699/4447990/4441813
Box 13690 – 00800
4.
Express
Automation Ltd
Nairobi,Tel: 20 - 630000, Box 22709 – 00400
5.
Paypoint Solutions Anniversary Towers, Nairobi
Tel: 20 - 218104, Box 836 – 00606
6.
Sharp Electronics
Technology Ltd
Wambui Rd, Off Thika Rd, Nairobi
Tel: 20 - 316171/6752812/3
Box 30857 – 00100
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Total Solutions Ltd
Nairobi, Tel: 20 – 374 8347/92/7007
Box 43427 - 00100
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Awal Ltd
Off Msa Rd, Nairobi, Tel: 20 – 531 702/809
Box 17983 - 00500
9.
Data Reliability
Networks Ltd
Mercantile Hse, Koinange St., Nairobi
Tel: 20 – 248324/317680, Box 10111 - 00100
Box 10111 - 00100
10. Knots Computers
Ltd
Occidental Plaza, Westlands, Nairobi
Tel: 20 – 3740465/3743656
Box 10909 - 00400
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11. Interpay Ltd
Bruce Has, Nairobi, Tel: 20 – 313358/9
Box 3333 - 00200
12. Prima Internationa Nairobi, Tel: 20 – 2725546
Ltd
Box 5725 - 00200
13. Valueplus Ltd
Rehani Hse, Nairobi, Tel: 20 – 245099
Box 10208 - 00100
14. Pergamon
Company Ltd
Kimathi Hse, Nairobi, Tel: 20 – 4348384
Box 25749 - 00603
15. Orient Express
Services Limited
Uniafric Hse. Koinange Street, Nairobi
Tel: 20 - 514139/229297, Box 51018 - 00200
16. Sharp Elonex
Technology
Capital Hse., Moi Ave., Nairobi
Tel: 20 – 342945, Box 16690 - 00100
17. Peckerwoods Ltd
Panesare Center, Off Msa Rd., Nairobi
Tel: 20 - 828370, Box 16613 - 00620
18. Japan Business
Machine
Corporation
(Africa) Ltd
Simco Plaza, Lusaka Rd., Nairobi
Tel: 20 – 556894, Box 19081 - 00100
19. Bititec Systems &
Suppliers Ltd
Agip Hse., Haile Selassie Ave., Nairobi
Tel : 0722 – 439930/ 0735 – 216776
Box 31842 – 00600
20. East African Fiscal
Westlands – Tel: 0733514778
21. Benser
Tel: 311453,214298 - Near Globe Cinema,
Afya Co-operative House, 2nd floor Rm1234
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22. Mustek E.A Ltd
Tel: 020-3752175-9, Westlands-MP Sha
Opposite Mesha Place Building
23. Attain Ltd
Tel: 020-2081268/0722746953
Building vision plaza mombasa road
24. Compulynx Ltd
Tel:3747060/61,
Along Parklands Road,centre point
25. Wisepower
Technology Ltd
Tel: 0722738517
26. First Mark
Solutions Ltd
Tumaini Hse, 3rd Floor, Rm 307
Tel:35530221,2152559-50
27. Bright
Technologies
Tel;244438
Disclaimer
This information is for guidance only and is subject to changes when law is amended. Any
omission do not absolve the taxpayer from making true and correct returns and statement of
accounts.
For further information, please visit the nearest DTD office or contact:
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KRA contact centre
Mr. Kennedy Nyasinga
Mr. Peter Ndubai
Mr. Andrew Chege
Taxpayers Education Programme
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REVISED: ZGO/DGW/14/09/2011
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Tel 4999999 or
020 2813134
020 2817080
020 2817073
020 2816095 / 020 2813068
FOR FURTHER DETAILS
http://www.kra.go.ke or any approved supplier