Income Tax Filing Changes Driven by eTIMS: What Taxpayers Need to Know
In a bid to drive compliance efforts following the implementation of eTIMS, KRA has made it even more exhaustive by ensuring compliance for not only VAT but also Income Tax. The authority has reshaped how Income Tax is prepared, declared and validated using eTIMS. All of this is as an effort of KRA to enforce a more data driven and transparent tax system. Some of these changes are backed by the law and KRA is just enforcing what has already been stipulated. Section 23A(4) of the Tax Procedures Act (Kenya) and Paragraph 10 of the Tax Procedures (Electronic Tax Invoice) Regulations 2024 for instance stipulates how some expenses are not to be validated against Etims. These exclusions include airline passenger ticketing, employment-related expenses such as salaries and wages, interest expenses, and financial institution charges. Additionally, investment allowances and internal accounting adjustments captured in dedicated tax computation fields are not subject to eTIMS validation. If ...