Transcript ETR

INTRODUCTION OF ELECTRONIC TAX
REGISTERS IN KENYA
SEMINAR AT
SAFARI PARK HOTEL
1st December 2004
By SDC, VAT
Mr. Philip Odeny
Introduction and Background
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10.
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
Fiscalised Printers:
• This are high Speed Fiscal Printer connected in a computer
network to store every sales transaction in its Fiscal Memory while
it issues receipts to taxpayers.
Electronic Signature Devices:
• ESD is used in conjunction with the accounting system
• For a document to be valid it must bear the electronic signature
• ESD applies to computer based, printed tax documents issued to a
third party
• The text of the invoice passes through the ESD and is saved
• ESD performs an algorithm over all signatures Issues a HASH e.g.
SHA-1 algorithm to make every transaction virtually unchangeable.
• Retail fiscal units in the realm of business to business transactions
may use ESD for invoices, transport documents etc.
Electronic Tax Registers
• There is a whole range of ECRs for fiscal
and non fiscal purposes. The difference is
presence of FISCAL MEMORY UNIT.
Other Devices
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
Request
Signature
“SIGNED”
Invoices,
Receipts Etc.
Other Devices
Telecom:
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?
ETR:
• 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;
Software Houses
• 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.
ADVANTAGES
• 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
Implementation Plan
• 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.