Don’t confuse eTIMS with VAT (eTIMS Vs VAT)
Business owners, this message is for you.If you’re telling customers, ‘If you want an eTIMS receipt, you’ll have to add 16%,’ please read this before you lose customers and unintentionally create compliance problems for your business
eTIMS Vs VAT
Let me make it clear why I’m talking about this..
I’ve noticed a growing trend across Kenya.
A customer asks for an eTIMS invoice, and suddenly the supplier says, ‘You’ll have to add 16%.’
But here’s what you and every business owner needs to understand.
eTIMS is an electronic invoicing system. While VAT, as per KRA and Kenyan tax laws is a tax obligation.
So, the two are not the same. Period
In short, issuing an eTIMS invoice does not automatically mean you should charge VAT.
Is eTIMS and VAT the same?…..Let us Get the law right
Friend, if your business is not VAT registered, you should be very careful about charging customers VAT.
Only VAT obligated businesspeople should add the 16% on their prices…..that is what the law says…
That is to say this: If you are VAT registered and you’re supplying VATable goods or services, then charging VAT may be perfectly okay for you.
The important thing is this:
Don’t use eTIMS as the reason for increasing prices. Let the law determine whether VAT applies.
VAT Vs eTIMS – Protect your business reputation
Here’s my advice to you as a CPA John Gitahi.
If your costs have genuinely gone up and you need to adjust your prices, that’s a business decision.
But don’t wait until a customer asks for an eTIMS invoice and then suddenly tell them to add 16%.
Just review your prices properly. Go on and update your price list. Then of course, communicate any changes clearly and professionally.
Remember:
Customers today are becoming more informed. And if they feel you are unfairly charging them an extra 16% simply because they requested an eTIMS invoice, many won’t argue with you—they’ll simply start to quietly buy from your competitor.
Because while it is true that in business compliance is important—so is customer trust.
Final Words- eTIMS Vs VAT
So before adding 16% to every eTIMS transaction, make sure you understand whether VAT actually applies to your business and to the goods or services you’re selling.
I’m CPA John from BziNex, where we simplify Kenyan tax so entrepreneurs can stay compliant and grow with confidence.
Have you seen businesses doing this? Or are you a business owner facing this challenge? Share your experience in the comments. Let’s learn from each other. You can also Whatsapp +254 797 532 345Â if you want any help on how to go about this.