Job Wanjohi, HSC

Tune in to @tv47news to hear insights from our very own Head of Policy Research and Advocacy at KAM, @wanjohijb, alongside other expert panelists, as they dive into the discussion on AfCFTA vs Moving East. Livestream: youtube.com/watch?v=2VJTTZ… #KAMAdvocacy

We will be in conversation with Mr Job Wanjohi, Head of Policy Research & Advocacy at Kenya Association of Manufacturers. Listen live: radio.capitalfm.co.ke #DriveInn

Folks, we finally have the National Tax Policy. The document has been published as the Sessional Paper No.02/2023. Something I think we should all take note of is the publication of this document right in the middle of stakeholder submissions on Finance Bill 2024. My view is that the timing is spot on because it helps nuance the Finance Bill 2024 debate around the policy guard rails that should steer tax proposals in Kenya. A 🧵

We saw the very first draft of the National Tax Policy on July 7th, 2022. See 🧵below for its highlights x.com/AmbokoJH/statu…

On Motor Vehicle Tax: @DeloitteKenya's submission: · They propose the tax be slapped at 0.5% of the value of the unit · They propose the floor of the tax be Kes 1,000 & the ceiling be Kes 20,000 · They propose the penalties be aligned with the Tax Procedures Act I expected a point from Deloitte on clarity around valuation, maybe peg it on the last insurance valuation? Present framing gives KRA quite some room @ICPAK_Kenya's submission is that the proposal around Motor Vehicle Tax should be done away with entirely @IEAKenya's submission was less explicit but sounds like they want the proposal dropped

@KAM_Kenya tabled an interesting proposal - as opposed to VAT exemptions for manufactured goods, extend a lower VAT rate (<16.0%) The Association also wants all taxes & levies on goods manufactured for exports to be claimable

@KAM_Kenya's illustration on what the proposed 25.0% excise duty on edible oil would mean from a price point: · 1 litre shooting from Kes 300 to Kes 468 · 5 litres from Kes 1,500 to Kes 2,340 · 20 litres from Kes 4,100 to Kes 6,396

If you are interested in the entire conversation on what happens post the March 31st sunset date for mandatory eTIMS onboarding by businesses, catch it via the link below youtube.com/watch?v=2DP81k…

@KWaruiru argues that whereas the gist of eTIMS is to bring every transaction into visibility, the implementation should have adopted thresholds. His view is that the turnover tax floor of Kes 1.0M in annual turnover should have been used to guide the roll out.

@ICPAK_Kenya is also calling for an extension for eTIMS onboarding. @KWaruiru argues that the precedent set with the roll out of Electronic Tax Registers (ETRs) in 2005 points us to the need for a prolonged process in the digitisation of tax administration.

@wanjohijb tells us the @KAM_Kenya is pushing for an extension of the window for eTIMS onboarding to July 31st, 2024 (essentially pushing it to FY2024/25). The Association's view is that 7 months was too short a period for businesses to comply

On February 24th, Rwanda introduced incentives for their equivalent of eTIMS (Electronic Billing Machine Invoices) Any consumer who requests to be issued with an electronic invoice is eligible for a reward of up to 10.0% the VAT amount captured on the invoice

Also, an interesting consideration on the table following the low uptake of eTIMS is that KRA is looking to borrow from Rwanda & introduce incentives for tax payers who insist on generation of eTIMS invoices for transactions.

To realise this ambitious target & bolster the 22.1% performance rate registered by eTIMS, KRA is: · Currently rolling out reverse invoicing on a case by case basis targeting aggregators · Also planning to roll out Buyer Initiated Invoicing to net micro & small businesses

Here's a big one, @HKWangwe tells us that in the grand scheme of things, GOK is looking to have eTIMS onboard 7.0M new taxpayers. Yes, 7.0M!! If you consider the entire tax register currently has 6.0M - 7.0M tax payers, you realise the scale of this ambition.

Here's the breakdown of the 202,291: · 76,905 – earlier onboarded (i.e, were on TIMS) · 63,800 – onboarded via eTIMS (VAT registered but weren't on TIMS) · 61,586 - non-VAT registered onboarded via eTIMS Note: 30.4% onboarded are non-VAT of which 38,000 used eTIMS lite & USSD

First, KRA closed March 31st , 2024 with a 22.1% performance rate having onboarded just 202,291 businesses on eTIMS against a target of 915,000. Important to remember here that eTIMS effectively kicked off on Sep 1st, '23, so it has been a 7 months long onboarding exercise

Summary of key issues: · KRA is currently rolling out reverse invoicing on a case by case basis targeting aggregators · KRA will roll out buyer initiated invoices · KRA is working with MNOs for bulk eTIMS invoicing solutions for large traffic/volume businesses

So what next following the March 31st sunset date for mandatory onboarding of businesses on eTIMS per Sec23 of the Tax Procedures Act? I hosted a stock take & forward leaning discussion with @KAM_Kenya's @wanjohijb, @ICPAK_Kenya's @KWaruiru & @KRACorporate's @HKWangwe A 🧵

The sunset date for mandatory onboarding on the electronic tax invoice management system (eTIMS) is here. As at March 26th, 190,000 tax payers had been onboarded on eTIMS, 26,000 of whom onboarded via the informal economy targeted channels of USSD & eTIMS lite. This means that starting April 1st, any tax payer who is required to & does not issue an electronic invoice will face the steep penalty of two times the tax due as per the provisions of Sec86(2) of the Tax Procedures Act. Next on @ntvkenya's #BusinessRedefined, a deep dive into eTIMS, what appears to be low uptake, & tax administration. April 2nd, 7:30 - 9:00pm.