eTIMS — the Kenya Revenue Authority's electronic Tax Invoice Management System — started life as a VAT enforcement tool. In 2026 it is much more than that: it now determines whether your expenses are tax-deductible at all. Here is what every Kenyan business owner needs to understand.
The rule that changed everything
Since January 2024, any business expense not supported by a valid eTIMS invoice is not deductible for income tax purposes. That means if your supplier gives you a handwritten receipt or a plain Excel invoice, the expense is disallowed when computing your taxable profit — you effectively pay corporate tax (30%) or individual rates on money you actually spent.
KES 1,000,000 of un-invoiced expenses can cost a company up to KES 300,000 in extra tax. Insisting on eTIMS invoices from suppliers is no longer good practice — it's self-defence.
Who must onboard on eTIMS?
Everyone in business. VAT-registered taxpayers were first, but the requirement extends to non-VAT businesses too — sole proprietors, partnerships, companies below the VAT threshold, professionals and landlords with commercial income. KRA has provided simplified options so scale is no excuse:
- eTIMS Lite — for small taxpayers, accessible via USSD (*222#) and the eCitizen portal, no special hardware needed.
- eTIMS Online / Client software — desktop and mobile apps for invoicing from a computer or phone.
- System-to-system integration — for businesses running POS, ERP or billing software (including Odoo and Zoho), invoices can flow to KRA automatically.
What a compliant invoice must show
A valid eTIMS invoice carries a KRA control unit number and QR code, your PIN and the buyer's PIN (for B2B), the item description, and the tax breakdown. Your customers — especially corporate ones — will increasingly refuse to pay invoices that don't validate, because they can't deduct them.
Penalties for non-compliance
Failing to issue an electronic tax invoice attracts a penalty of double the tax due on the transaction. Beyond direct penalties, non-compliance creates a data mismatch: KRA sees your sales through your customers' eTIMS claims and your purchases through your suppliers' filings. If your declared income doesn't reconcile with that picture, expect a compliance check.
Getting eTIMS right in 2026: a checklist
- Confirm your business is onboarded — and that invoices are actually transmitting, not just generated.
- Integrate eTIMS with your POS or accounting system so compliance is automatic, not manual.
- Train whoever raises invoices — one untransmitted invoice at a spot check is enough to trigger scrutiny.
- Audit your supplier list: flag any supplier who cannot issue eTIMS invoices, and price the lost deduction into what they charge you.
- Reconcile your eTIMS sales data to your VAT returns monthly — mismatches are KRA's favourite audit trigger.
Probity Finance sets up eTIMS integration with Odoo, Zoho and common POS systems as part of onboarding — so every invoice you raise is compliant by default.
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