KRA eTIMS

What is eTIMS & The Legal Mandate

• A mandatory digital system for generating, transmitting, and storing electronic tax invoices.
• Who Must Use It: All persons engaged in business in Kenya. This applies universally to:

Companies, sole proprietors, and partnerships.

VAT-registered and non-VAT registered businesses.

Suppliers of exempt goods/services (e.g., schools, hospitals).

Informal sector traders.

• Since January 2024, a valid eTIMS invoice is the only acceptable proof for claiming business expenses for tax deduction (Income Tax).
• Older Devices: Taxpayers who owned KRA-approved TIMS/ETR gadgets before eTIMS was launched may continue using them, but migration to eTIMS is encouraged.

Available eTIMS Solutions

KRA provides different solutions for various business types and sizes.

A. For Small & Micro Businesses (eTIMS Lite Suite)

• eTIMS Mobile App: For smartphones (Android/iOS).
• USSD Service: Dial *222# on any mobile phone (no internet needed).
• Web Portal on eCitizen: Accessed via the KRA eCitizen platform (ecitizen.kra.go.ke).

B. For Other Business Types

• eTIMS Online Portal: A dedicated web portal for service-based businesses.(etims.kra.go.ke)
• eTIMS Client Software: Downloadable software for computers; best for businesses selling goods.
• Integration Solutions (VSCU/OSCU): For large businesses to connect existing ERP/accounting software (e.g., QuickBooks, Zoho) to KRA.

C. Buyer Initiated Invoice on e-citizen

• Buyer-Initiated Invoicing: Allows a buyer to generate a valid eTIMS invoice if purchasing from a small supplier (turnover ≤ KSh 5M). The seller must give consent via USSD or eCitizen.

Step-by-Step Onboarding Process

The primary registration is done online via the KRA eTIMS portal.

• Sign Up: Visit etims.kra.go.ke, click “Sign-Up,” and enter your KRA PIN.
• Verify: Enter the OTP sent to your iTax-registered phone number and create a password.
• Log In & Request: Log into the portal, go to “Service Request,” and select your preferred eTIMS type (e.g., Client, VSCU).
• Submit Details: Provide required business and director details for verification.
• Approval & Setup: Once approved, you will receive login credentials. For specific solutions:

eTIMS Client: Download software from KRA, install, and configure with your credentials.

eTIMS Lite/Online: Use credentials to log into the respective app or web portal.

4. Income Tax Validation

This is a major shift in tax compliance that businesses must prepare for.

• Starting 1st January 2026, the KRA’s iTax system will implement automated validation of income tax returns.
• How It Works: The system will automatically cross-check the income and expenses you declare in your tax return against data from: eTIMS (all sales and purchase invoices),Withholding Tax certificates, Customs import records.
• Key Implication: Any expense not supported by a matching electronic record in these systems will be flagged and may be disallowed for tax purposes. This can lead to a higher tax assessment.
• What You Must Do to Prepare:

Ensure all your suppliers issue eTIMS-compliant invoices with your correct KRA PIN.

Start conducting pre-filing reconciliations—match your books against your eTIMS transaction reports.

Consider requesting an eTIMS schedule from your KRA account manager to identify discrepancies early.

Why Compliance is Crucial

• Avoids penalties and disallowed expense claims.
• Ensures eligibility for VAT refunds.
• Required for obtaining a Tax Compliance Certificate (TCC).
• Prepares your business for the income tax return validation

Disclaimer: This article provides general information only and does not constitute legal or tax advice. Tax laws are complex and subject to change. Always consult qualified professionals for advice specific to your situation.

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