admin, Author at AVIID

Highlights from H.E. President William Ruto’s Speech at the American Chamber of Commerce Regional Business Summit

by admin | Apr 3, 2023 | Industry News, Tax Law Changes

H.E. President William Ruto recently addressed the American Chamber of Commerce Regional Business Summit, where he spoke about Kenya’s economy and the government’s plans to support business growth in the country.

One of the key themes of the speech was the importance of Small and Medium-sized Enterprises (SMEs) to Kenya’s economy. The President noted that SMEs account for 80% of employment in the country and announced the government’s commitment to providing financial support and regulatory reforms to help SMEs grow and succeed. This is a crucial step towards creating more jobs and promoting economic development across the country.

Here are some of the key highlights from his speech to look out for in the 2023 budget:

– VAT on exported services will be removed in the Finance Bill, in the coming budget, in June 2023.

– The government of Kenya will making a policy shift and effective June 2023, all verified tax refund claims will be payable within six months. If for whatever reason a refund is not made by the Kenya Revenue Authority (KRA) within this period, the taxpayer can offset their claim against future tax liability, without further application to KRA.

– The government will exempt startup companies from paying taxes on such unrealised gains on employee-allocated shares starting 1st July 2023.

– The government will review the Special Economic Zones and Export Processing Zones laws to remove impediments to attracting new local and foreign investments. The raft of amendments are under stakeholder consultations and will be in place by 1st July 2023.

In conclusion, President Ruto’s speech at the American Chamber of Commerce Regional Business Summit highlighted the government’s commitment to supporting business growth and economic development in Kenya. His emphasis on SMEs, infrastructure development, and youth empowerment demonstrate the government’s focus on creating a more inclusive and prosperous economy for all Kenyans.

What is KRA eTIMS (How it works and why it replaced TIMS)

by admin | Mar 27, 2023 | Uncategorized

The eTIMS works by linking businesses’ sales systems to the KRA database. This allows the KRA to track all transactions and ensure that the correct amount of VAT is being paid by each business. The system is also able to detect any anomalies or inconsistencies in transactions, which can trigger an investigation by the KRA.KRA eTIMS (stands for Kenya Revenue Authority Electronic Tax Invoice Monitoring System) is a digital platform developed by the Kenya Revenue Authority (KRA) to facilitate taxpayer identification, registration, and management of tax-related activities. It is an improvement on the previous Tax Invoice Management System (TIMS), which was deemed ineffective in curbing tax evasion and fraud.

The KRA eTIMS system was developed to improve the efficiency of tax administration in Kenya, reduce the time and costs associated with tax compliance, and increase revenue collection. The system provides a secure online portal where taxpayers can register and update their personal and business information, file their tax returns, make payments, and access other tax-related services.

How it works:

KRA eTIMS works by providing a secure online platform where businesses can issue, transmit, and validate electronic tax invoices and receipts. It uses an electronic signature and encryption technology to ensure the authenticity and integrity of the invoices and receipts.

To use the eTIMS platform, businesses must first register with the KRA and obtain an Electronic Signature Certificate (ESC). The ESC is a unique digital certificate that identifies the business and allows it to access the eTIMS platform.

Taxpayers must first register for an account and obtain a KRA PIN (Personal Identification Number). They must also ensure that their sales systems are integrated with the eTIMS platform. Once the systems are integrated, all transactions are automatically recorded and transmitted to the KRA in real-time. Businesses are also required to issue electronic tax invoices to their customers using the eTIMS platform.

Once registered, the business can then issue electronic tax invoices and receipts to its customers. The invoices and receipts are automatically uploaded to the eTIMS platform, where they are stored securely and can be accessed by the KRA for audit purposes.

Taxpayers can log in to the eTIMS portal and access a range of tax-related services, including filing returns, making payments, and accessing tax compliance certificates.

Why it replaced TIMS:

KRA eTIMS replaced the old Tax Invoice Management System (TIMS) because the old system was outdated and could not keep up with the changing needs of businesses and the KRA. TIMS was limited in functionality and did not have the security features necessary to protect against tax fraud and evasion.

The new eTIMS system is more advanced and user-friendly, with enhanced security features that make it more effective in combating tax evasion. It also allows for real-time data processing and faster tax returns processing, which helps to improve tax compliance and revenue collection. Overall, KRA eTIMS is a significant improvement over the old system, and it has helped to modernize tax administration in Kenya.

One of the key benefits of the KRA eTIMS system is that it provides real-time access to taxpayer information, which enables KRA officials to monitor compliance and detect potential tax fraud or evasion. This helps to improve tax administration and increase revenue collection for the government.

Another benefit of eTIMS is that it allows businesses to access their tax records online, providing real-time visibility into their tax position. This makes it easier for businesses to plan and manage their tax liabilities, ensuring that they are always in compliance with KRA regulations.

eTIMS also has a number of other features, including online payment of taxes, online registration for new taxpayers, and an electronic audit trail that makes it easier for KRA to monitor and enforce compliance.

The eTIMS system is considered more efficient and effective than its predecessor, TIMS, because it eliminates the need for manual verification of invoices and reduces the risk of fraudulent activities. The system also provides businesses with a more convenient way of filing their VAT returns and reduces the amount of paperwork involved.

Overall, the eTIMS system is an important tool for the KRA in its efforts to improve tax compliance and increase revenue collection. By ensuring that all transactions subject to VAT are accurately monitored and recorded, the KRA can identify and address any tax evasion or fraud, while also providing businesses with a more streamlined and efficient tax system.

New NSSF Contribution Rates in Kenya

by admin | Mar 22, 2023 | Industry News, Tax Law Changes

The National Social Security Fund (NSSF) in Kenya has announced new contribution rates that will take effect from April 2023. The changes were announced by the Cabinet Secretary for Labour and Social Protection, Hon. Simon Chelugui, and are aimed at ensuring that the fund remains sustainable and able to provide adequate benefits to its members. The new rates are set to increase the amount that employees and employers contribute to the NSSF.

Under the new rates, the employee contribution rate will increase from 6% to 7% of their gross monthly salary. The employer contribution rate will also increase from 6% to 8% of their employee’s gross monthly salary. This means that the total contribution to the NSSF will increase from 12% to 15% of the employee’s gross monthly salary.

The new NSSF contribution rates are as follows:

For employees:

Those earning a monthly basic salary of up to Kshs 6,000 will contribute 6% of their basic salary to the NSSF.
Those earning a monthly basic salary of between Kshs 6,001 and Kshs 18,000 will contribute Kshs 360 to the NSSF.
Those earning a monthly basic salary of more than Kshs 18,000 will contribute 12% of their basic salary to the NSSF.

For employers:

Employers will contribute 6% of their employees’ monthly basic salary to the NSSF.

It is important to note that the NSSF is mandatory for all employees in Kenya, regardless of their age or income level. The fund is designed to provide a safety net for workers in the event of retirement, disability, or death. The new rates will apply to all members of the fund, including those who are currently contributing.

The government says that the new rates are aimed at improving the benefits that Kenyan workers receive from the NSSF. The NSSF provides a range of social security benefits, including retirement benefits such as pensions, disability benefits, survivor benefits, and emigration benefits. These benefits are designed to provide a safety net for Kenyan workers and their families in times of need.

The new rates are expected to increase the amount of money that is available to the NSSF, which will enable the agency to provide more comprehensive and effective social security benefits to Kenyan workers. The government has also stated that the new rates will help to ensure the long-term sustainability of the NSSF.

While some Kenyan workers may be concerned about the impact of the new rates on their take-home pay due to the tough economic times, it is important to remember that the NSSF benefits are a crucial part of the social safety net for Kenyan workers. By contributing to the NSSF, workers are investing in their own future and that of their families

In conclusion, the new NSSF contribution rates in Kenya are aimed at ensuring that the fund remains sustainable and able to provide adequate benefits to its members. The increase in contributions will enable the fund to improve its investment returns, reduce administrative costs, and provide better benefits to its members.

Tips for a more successful Business

by admin | Jan 2, 2020 | Small Business Advice

Every entrepreneur’s dream is to build a thriving business. Below are a few tips that will help you build a successful business in 2020.

Define your success

Success is both relative and seasonal in that it is different for each individual and it can change overtime. Be clear on what success means to you so that you can be clear on what you are working towards.

Plan

Start of with the following questions to know if you have clear goals for your business

What is your 2020 revenue goal for your business by month?
What is your 2020 budget/expenses by month?
What is your execution plan to accomplish the above set out goals?

If the answers are not clear you don’t have a plan. Below are a few ways on how you can go about being clear on your plan

First and foremost know how much you made in 2019 and how you made it then figure out how much you want to make in 2020 by either expanding, reducing or eliminating your products or services. e.g. if you run an accounting firm offering book keeping and tax services and a bigger share of your revenue came from your tax offering it would be prudent to concentrate your efforts on that.

Secondly think of your execution plan for the goals you’ve set. You have to be clear on how you’ll make it happen. Dig in on how you made the previous years revenue and double your efforts on making that happen.

Thirdly know how much you spent in 2019 and how it was allocated e.g. Facebook ads, payroll. Your execution plan will determine how you’ll either increase or decrease the expenses.

Execute
A plan means nothing without action. Success is not solely on writing it down. You have also to be intentional and deliberate with what you are doing. Don’t just do things just for the sake of it.

Remember plans don’t always work out so it’s important to learn how to be adaptable in business.

Have a successful year growing your business.

Tips on how to control your Cash Flow

by admin | Dec 17, 2019 | Accounting Basics, Bookkeeping

Cash is your businesses super power and in order to operate efficiently and effectively while accelerating your business growth you must maintain a positive cash flow always. Below are a few tips that will guide you along the way: Get clear on the cash outflows in your business. This means the when, the how and why to every penny that is leaving your business. Also determine the R.O.I ( Return on Investment) of the expense before you make any purchase. Is the outflow needed in the operations of your business or is it just a money wasting outflow? Get CRYSTAL clear on every single coin that is leaving your company. Operate on 80% or less of your revenue. Assuming your business earns a monthly revenue of Kshs. 100,000 you can not spend more than Kshs. 80,000 on expenses. Set a cap on how much you should spend per week or per month in your business. Put the extra Kshs. 20,000 in a separate cash reserve for your business. Set spending caps for each category Let’s say the categories for your business are Inventory, Operating and Marketing expenses further break down the Kshs. 80,000 mentioned earlier. e.g 50% on Inventory, 30% on Operating expenses, 10% on Marketing expenses and 10% on miscellaneous. Hire a Finance Manager They will hold you accountable and provide insights and oversight on how you will achieve your MONEY GOALS. They will make sure that you that you don’t exceed your allocations and provide an accurate, reliable and timely Financial Management System. On top of that they should be able to dissect that information and provide you with strategies that will help you increase Revenue, CashFlow and generate Profits.

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