In 1st of April 2024, the government of Kenya enforced the use of the new electronic Tax Invoice Management System(e-TIMS), which will gradually replace the Tax Invoice Management system(TIMS) introduced in the last quarter of 2022. In this article we delve into the differences between the two and see why e-TIMS is such a big problem to many businesses.
Difference between eTims and Tims
The main difference between the two is in how data is transmitted to KRA servers. For Tims the businesses would buy a device from KRA approved suppliers, the devices would act as a gateway between the business systems and the ITax servers, sending invoices and credit notes and receiving back the invoice no and qr code url, these devices include Tremol,Datecs,Incotex and Deon Online among others. The devices come in 4 types:
- Type A – For small business that do manual invoicing. Invoices are done in the device itself and it prints a qrcode signed receipt.
- Type B – Similar to Type A but has the capability to connect to external devices such as printers and computers
- Type C – Advanced devices that are designed for medium to large business who have a high volume of transactions.
- Type D – Similar to Type C but designed for specific industries such as restaurants and petrol stations
In this article I will focus on Type C & D since the businesses in this Category of devices are the most affected by the transition from TIMS to e-TIMS. In Type C & D the device manufacturers would provide API to send and receive from the device. Based on the API, the supplier or ERP vendors built software (SmartCapture, Tevin, BeaverSigner among others) that would send invoice, credit note and debit note data to KRA via the device. The illustration below demonstrates how the whole process works.
e-TIMS works in a similar manner but instead of having the device as an intemediary between the business and Itax, KRA have introduced four applications.
- eTims client application – This is a desktop application that is installed in the businesses/owner’s desktop/laptop, the application allows for importing of customers, suppliers, items and recording of sales, purchases, stocks activities and imports data. Allows printing of QrCoded invoices.
- eTims Mobile application – Installed on the businesses phone, allows for creating of invoices and printing of QrCoded invoices.
- Online eTims – Similar to client application but is web based and accessed through a KRA portal.
- eTims System to System Integration – This is designed for integration to ERP and accounting systems. Data posted in your ERP is updated realtime to the e-TIMS System. The solution is comparative to the TIMS Type C &D device and is also the focus of this article.
Comparison Table of Tims vs e-TIMS
| # | TIMS | e-TIMS | |
|---|---|---|---|
| 1. | Ease Of Integration | Very easy to integrate to existing ERP/Accounting systems | Very Hard |
| 2. | Ease Of Use | Very easy as it allowed integration to existing System hence no data duplication. | Difficult as majority of ERPs/Accounting solutions are having problems with the integration. Businesses are having to duplicate data between their systems and the eTims application. |
| 3. | Cost | Expensive – Device prices would range from KES. 40,000 for Type A to KES 150,000 for Type C. | Free |
| 4. | Category | Medium to Large Businesses | Small Businesses |
| 5. | Durability | Stable & Mature Platform | New & Untested |
| 6. | Data Transmission | Only transmits invoice, credit note and debit note data to ITax. | Transmits customers, suppliers,items, warehouses/branches, invoices, credit notes, debit notes, purchase invoices, purchase returns, imports,stock adjustments and stock transfers and much more. |
In summary e-TIMS is a good solution for small businesses as its provided for free and also offers an invoicing solution where they can maintain their customers, suppliers, items and transactions.
But when it comes to businesses with high volume of transactions it has a long way to go. Very few ERP suppliers have had luck integrating to it and the conditions for integration are quite stringent which is hindering alot of independent developers from building the integration applications.
A lack of clear communication from KRA on the workings of the API and its setup is another wall that indepedent developers are facing. This is giving the impression of it being an unfinished product.
With e-TIMS, the aim of the government is to have a record of all transactions of the businesses in the country, be it sales, purchases, imports, stock transfers and stock adjustments, that way it will be impossible to falsify records.
Its our opinion that if a business is using a TIMS Device without any significant issues, they should stick with it up until a time a deadline is given by KRA.
N.B. Tims device can no longer be bought but a business can switch to a different model if they wish.
For more on this or about business software, contact us on info@novacraftsystems.com or call us on “0785464394“
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