Chamber of Commerce raises concerns over Ksh.2M eTIMS penalty proposed in Finance Bill

In a statement on Monday, KNCCI president Erick Rutto argued that the proposed penalty is punitive and will severely affect Micro, Small, and Medium Enterprises (MSMEs). 

He further noted that there has been a poor adoption of the eTIMS system by MSMEs which will hamper the streamlining of tax collection and cripple compliance.

"We believe that the MSMEs are the backbone of our economy, contributing about 40% of GDP and employing more than 80% of Kenyans. The majority of them operate in the informal economy and have neither clearly understood nor adopted eTIMS," he said.

He added that the increment will lead to the loss of jobs and opportunities for many Kenyans.

KNCCI has therefore advised that before the unsavory penalties are implemented all MSMEs should be apprised of the processes of adopting the eTIMS system to allow an effective revenue collection structure.

"Many small business owners may not have the technical knowledge or resources to implement these systems effectively," said Rutto.

"The government should invest in comprehensive capacity-building programs and provide dear, accessible information and training to ensure that MSMEs are well-equipped to comply with eTIMS."

They want the government to prioritise capacity-building initiatives to ensure that MSMEs can effectively adopt and comply with eTIMS. 

On March 26, the Kenya Revenue Authority (KRA) warned business owners who are yet to get on to the eTIMS platform that they will not be eligible for tax refunds if they do not onboard their services and also risk facing a penalty double the amount of taxes evaded.