INTRODUCTION OF ELECTRONIC TAX REGISTERS IN KENYA
SAFARI PARK HOTEL
1st December 2004
By SDC, VAT
Mr. Philip Odeny
Introduction and Background
- What is Electronic Cash Register - ECR ?
- What is Electronic Tax Register – ETR ?
- Other Fiscalised Electronic Devices - FED.
- Why ETR and FED?
- Who should use ETR and FED ?
- Selection of ETR and FED.
- Selection of Suppliers.
- Role of Suppliers.
- Role of Software Houses.
- Implementation Plan.
What is Electronic Cash Register - ECR ?
- 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.
- Electronic Cash Registers have been in use by taxpayers for long.
What is Electronic Tax Register – ETR ?
- Electronic Tax Register (ETR) is a Cash Register but with Fiscal Memory.
- Fiscal Memory is a special Read Only Memory built into the cash register to store tax information at the time of sale.
- ETR can be used as stand alone or configured into a network.
- ETR has special security features e.g. seal, memory, serial no., special technical specifications etc.
Other Fiscalised Electronic Devices - FED
Slide 6 Slide 7
Electronic Tax Registers
- There is a whole range of ECRs for fiscal and non fiscal purposes. The difference is presence of FISCAL MEMORY UNIT.
Hi Speed Fiscal Printer:
Has two RS232 ports for PC online operation and barcode
POS Compact Modular System:
Aimed at the software developer who wants to sell a customized POS solution or at the retail equipment dealer who wants a turn-key POS solution with advanced software.
Embedded-PC model is built using
the CPU and comes in a very small shape, contains the AC power supply and hard disk.
COMPUTER SYSTEMS AND ESD
ELECTRONIC SIGNATURE DEVICE
“SIGNED” Invoices, Receipts Etc.
Ethernet and Internet / email enabled cash registers are low cost, stand alone ETRs.
Electronic Signature Device:
ESD has many shapes and its functions have been previously discussed
Why ETR and FED?
- Ordinary ECR is prone to falsification.
- Has a Tax memory that carries information on tax.
- Tax memory is a programmable read only memory (EPROM or PROM).
- The tax memory capacity should store data for at least 5 years or 1800 day transactions.
- Issue fiscal receipts which are easily identifiable for inspection purposes & daily fiscal summary report.
Who should use ETR and FED ?
- KRA intends to enforce the use of ETR and FED on EVERY taxpayer.
- Selection of the device to use depends on the needs of the business.
- ETR will mainly be used by small scale retailers.
- ESD and printers are to be used by computerised traders.
Selection of ETR and FED.
- There exist various types of ETRs each with its functions.
- This depends on the needs of a trader and each model/machine will be vetted according to the stipulations of the law.
Selection of Suppliers
- This exercise involves advertisement through press
- Submission of request to supply by the suppliers.
- Inspection of requests and brochures by the technical committee with respect to criterion defined in the ETR Regulation.
- Pre-qualification of suppliers who meet requirements.
- Request of sample machines for inspection by technical committee.
- Approval process by technical committee results in appointment of suppliers who meet ALL requirements set forth.
- Among salient features the selection committee shall verify are financial standing, technical background, experience in similar undertaking and branch network of the supplier.
Role of Supplier
- To work with KRA to ensure that the models they supply fulfill the requirements of the ACT.
- Ensure continuity of the model by maintaining ceaseless backups.
- Work with KRA to improve the system through innovation.
- Work with KRA to identify offenders.
- Detailed identification of the manufacturer or importer;
- The software developer who wants to sell a customized POS solution in form of Drivers or at the retail equipment software shall be essentially “pointing” or “re-aligning” or “to talk” to the POS systems to save copies of all transaction into fiscal memory.
- The software shall ensure re-use of some existing POS using ESD or added Fiscal Modules that shall be guided in operations using software drivers created or sourced by Software Houses.
- Innovation of new technologies.
- More jobs for technicians
- More jobs for the software houses
- Better control and management of business by traders
- Shorter audit periods by taxman
- Less paper work
- This is a long term project where more emphasis should be placed on correct implementation in addition to time limits.
- KRA is to lead the whole process and has to keep taxpayers informed of the steps to follow.
- Implementation plan is being worked and will be publicised.