/** * The main template file * * This is the most generic template file in a WordPress theme * and one of the two required files for a theme (the other being style.css). * It is used to display a page when nothing more specific matches a query. * E.g., it puts together the home page when no home.php file exists. * * @link https://developer.wordpress.org/themes/basics/template-hierarchy/ * * @package WordPress * @subpackage Tally * @since 1.0.0 */ ?>
As a business registered under VAT-taxpayer, it's crucial to understand the process to stay tax compliant. Most businesses today use business software to generate invoices and manage business activities. In such a case, the process of generating an electronic tax invoice begins from the ERP, to the control unit (Type C), and finally, with the KRA.
This article will walk you through the process of generating electronic tax invoices under the new TIMS system. This will give a snapshot of the e-invoicing process for all businesses using business software such as accounting software, ERP etc.
Here's a quick walkthrough on how to adapt and issue electronic invoices using the new ETR (Type C):
If you look at the process, there are 3 broad components of e-invoicing in Kenya. The business software, Control unit and the KRA portal. Let's understand all three components in detail.
Since you already have an existing ETR for submitting your taxes, you might need to upgrade it to comply with the new KRA TIMS regulations.
Your upgraded ETR should be able to integrate with the ERP software you use in your daily business operations. If you don't have a VAT-compliant ETR, you can purchase one from KRA-approved ETR manufacturers and suppliers listed on the KRA website. Get in touch with them, and they will provide you with the right ETR (Type C) that complies with the new regulations.
Once you purchase a compliant ETR, it will be configured with your ERP. Post that, you'll receive a confirmation e-mail from iTax with your details and those of the ETR you purchased. Next, you need to acknowledge the e-mail to activate the ETR. The ETR will then be activated, enabling you to validate and transmit your invoices to KRA.
Whenever you make a sale and issue sale invoices to your wateja (your buyers), the activated ETR will sign the and transmit an electronic version of the invoices from your ERP to KRA in real-time or near real-time over the internet.
The generated invoices from the ERP or accounting software pass over to the control unit before reaching the KRA. Every electronic tax register has a connected control unit that enables it to confirm the validity of the generated invoices.
It confirms whether the tax computations are correct and issues a control unit invoice number. This number is unique to every electronic invoice. Additionally, the control unit checks the validity of the buyer's PIN provided, and transmits the information to TIMS for storage. Along with the invoice number, the control unit also adds a QR code and control unit serial number.
Here is a quick checklist that a supplier needs to check before issuing the invoices to the customer:
Once the control unit confirms the validity of the electronic tax invoices, they are transmitted to the KRA for verification and authentication.
The KRA iTax Portal has a tax invoice number checker, which verifies the control unit invoice number and confirms the accuracy of tax details indicated on the e-invoice.
As a business owner, staying tax-compliant is easy once you understand the requirements of the new electronic tax regime.
However, the processes involved can be overwhelming, given that invoicing is a key aspect of businesses. With robust business management software like TallyPrime, you don't need to worry about generating tax invoices.
The software handles your VAT-compliance activities, from e-invoicing to return filing. This gives you more time and enables you to redirect your energy to focus on kukuza biashara (business growth). Take a free demo today and see how the software makes VAT compliance hassle-free.