Kenya’s tax system has changed for good.
If you run a business, freelance, or offer professional services, eTIMS is no longer optional. KRA is now actively enforcing it, and non-compliance comes with real financial consequences.
Whether you are a company, SME, or sole proprietor, understanding eTIMS is now a business survival skill.
Let’s break it down in a simple way.
The 2 Rules That Now Define Tax Compliance in Kenya.
Before we go into the steps, you must understand these two rules:
If your business is not registered on eTIMS, KRA will not issue a TCC, even if you file returns.
Starting with 2025 tax returns (filed in 2026):
Any expense not supported by a valid eTIMS invoice
Will be added back to your profit
And you will pay tax on it
In simple terms:
๐ If the expense is not visible on KRA’s system, KRA assumes it never happened.
This is why businesses must tighten their internal controls immediately.
KRA systems can now detect what you sell or buy.
What goes wrong:
A consultant issues invoices as “General Goods” instead of “Consultancy Services.”
What to do:
Ensure your products or services are correctly mapped to the right eTIMS codes.
Wrong descriptions can trigger audits.
Do not wait until year-end.
Why this matters:
If a supplier says they invoiced you but the invoice doesn’t appear on KRA’s system, you lose that expense.
Action:
Every month:
Download your eTIMS Purchase Report from iTax
Compare it with your internal expense records
Resolve missing or incorrect invoices immediately
Most compliance mistakes don’t happen in accounts—they happen on the ground.
Who needs training:
Procurement staff
Admins
Drivers
Field officers
Key rule:
A receipt is only valid if it has:
A QR code
An eTIMS control unit number
Delivery notes and cash sale receipts are not tax-valid.
This one rule can save your business millions.
Action:
Update your payment policy to state clearly:
“Payment will only be made upon presentation of a valid eTIMS invoice.”
This shifts compliance responsibility to your suppliers before you pay them.
Not every supplier is tax-compliant—and their mistake becomes your problem.
Before onboarding a supplier:
Check their KRA PIN
Confirm their registered name matches their documents
Check their tax obligations status
If they’re not compliant, don’t onboard them.
Generic receipts are useless for tax purposes.
Examples:
Fuel
Meals
Spare parts
Emergency purchases
Action:
Instruct staff that for any purchase above your policy limit:
The vendor must capture your business PIN
At the point of sale
No PIN = no deductible expense.
Thermal receipts fade. Audits don’t.
KRA requires records to be kept for at least 5 years.
Best practice:
Scan eTIMS invoices immediately
Rename files clearly (Date_Supplier_Amount)
Store them on Google Drive, OneDrive, or a secure system
Reverse invoicing is useful—but only in specific cases.
Rule:
If the supplier is VAT registered → They must issue the invoice
If the supplier is not VAT registered → You may reverse invoice via eCitizen
Using reverse invoicing incorrectly can invalidate the expense.
Fake eTIMS invoices already exist.
Action:
Randomly scan QR codes on invoices:
The scan should lead to KRA’s verification page
Amount, date, and supplier details must match
If it doesn’t match, reject the invoice.
Your contracts should shield you from supplier mistakes.
Add this clause to your SLAs:
“The Supplier shall indemnify the Client against any penalties, additional taxes, or disallowed expenses arising from failure to issue valid eTIMS documentation.”
This is legal protection, not aggression.
Don’t carry risky suppliers into the future.
Action:
Review suppliers who delayed or refused to issue eTIMS invoices in 2025
If they haven’t complied by now, replace them
They are a tax risk
Tax compliance is continuous.
Simple schedule:
Monthly: VAT filing & eTIMS purchase reconciliation
Quarterly: Supplier compliance review
Annually: TCC renewal check
Consistency prevents penalties.
eTIMS is now the backbone of tax compliance in Kenya.
If an expense is not on KRA’s system, it does not exist for tax purposes.
Makabe Consulting provides end-to-end eTIMS support, including:
eTIMS registration and invoicing setup
Staff training on valid documentation
eTIMS integration with accounting software
Tax compliance and health checks
Reach out and let’s make your business fully compliant and audit-ready.
Send us a message on => WhatsApp <= for quick support.
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