eTIMS in Kenya: The Complete 2026 Guide for Businesses

For many Kenyan business owners, eTIMS still feels like something KRA did to them rather than something they understand. They know it involves invoices. They know their accountant keeps asking for “eTIMS receipts”. And they have heard that expenses without them may no longer count. This guide to eTIMS in Kenya explains, in plain language, what the system is, who must use it, which eTIMS option suits your business, how to register, how to generate an eTIMS invoice, what changed in 2026, and the mistakes that are now costing businesses real money.

eTIMS rules have changed several times since the system launched, and KRA continues to adjust how it is applied. We have checked the points below against KRA’s published guidance and summaries of the law at the time of writing. Treat this guide as general information, and confirm the details for your own business on the KRA eTIMS portal or with a qualified tax adviser.

What Is eTIMS?

eTIMS stands for the electronic Tax Invoice Management System. It is KRA’s system for recording sales and issuing tax invoices electronically, with every invoice transmitted to KRA as it is created.

The legal basis is Section 23A of the Tax Procedures Act, 2015, introduced by the Finance Act 2023. In KRA’s words, it requires every person in business “to record each sale, issue and transmit invoices through an electronic system” prescribed by the Commissioner. eTIMS replaced and extended the older TIMS (Tax Invoice Management System), which mainly applied to VAT-registered businesses using electronic tax registers.

The practical effect is simple. When you sell, your invoice goes to KRA. When you buy, your supplier’s invoice goes to KRA. KRA can then match what you declare in your returns against what the system has already recorded.

eTIMS vs TIMS: What Is the Difference?

The two are often confused, because both produce invoices that KRA can see:

TIMS was built around VAT-registered businesses and electronic tax register (ETR) devices that sign and transmit invoices.
eTIMS is the wider system that covers every person in business, VAT-registered or not. It offers several ways to invoice, from a mobile USSD code to full integration with your accounting or ERP system.

If you already invoice through a compliant TIMS device, you may not need a separate eTIMS solution, but confirm this with KRA or your adviser, because device approvals and integration rules have been updated over time.

Who Must Use eTIMS in Kenya?

The short answer: anyone carrying on business. KRA has said that persons carrying on business, including informal sector and small businesses, are required to electronically generate and transmit their invoices to KRA. That includes:

VAT-registered businesses
non-VAT businesses, including those on turnover tax
sole proprietors, partnerships and companies
professionals and consultants who invoice for services
informal sector traders, jua kali artisans and farmers selling as a business

Earlier commentary sometimes linked eTIMS to a turnover threshold, which caused confusion. The safer position today is to assume that if you sell goods or services as a business, eTIMS applies to you. It also applies indirectly to your customers: businesses that buy from you need your eTIMS invoice to claim the expense.

eTIMS is one part of a wider set of obligations. For the full picture of returns, deadlines and penalties, see our pillar guide to KRA tax compliance for small businesses.

Why eTIMS Matters More in 2026

For the first two years, many businesses treated eTIMS as optional in practice. That has changed, for two reasons.

1. Expenses now depend on eTIMS invoices

Since January 2024, the Income Tax Act has restricted deductions for business expenditure that is not supported by an invoice generated through eTIMS, subject to specific exceptions. In simple terms: if you pay a supplier and they do not give you a valid eTIMS invoice, that cost may not reduce your taxable profit. You end up paying tax on money you actually spent.

2. KRA now validates your returns against eTIMS data

From 1 January 2026, KRA validates the income and expenses declared in income tax returns against data it already holds. Published summaries by firms including PwC, BDO and EY describe three main sources: TIMS and eTIMS invoice records, withholding tax data and customs import data. If your return claims expenses that do not appear in that data, expect questions, adjustments or a demand.

KRA has provided a way to claim legitimate expenses that are not on eTIMS. You declare the transaction details in a dedicated section on iTax, rather than simply including them in the totals. This is not a loophole. It is a record-keeping obligation, and the details you upload must be supportable if KRA asks.

If you have ever felt that KRA’s pre-populated figures do not match your own, you are not alone. We explain how to check them in you filed your KRA returns, but did you file them right?

Which Expenses Don’t Need an eTIMS Invoice?

Some payments are exempt from the eTIMS invoice requirement for deduction purposes, because they are already captured elsewhere or are not ordinary supplier purchases. Commonly cited exceptions under Section 23A of the Tax Procedures Act and the Tax Procedures (Electronic Tax Invoice) Regulations, 2024 include:

emoluments paid to employees (salaries and wages, which go through PAYE)
imports, which are captured through customs entries
interest
investment allowances
airline passenger tickets
payments subject to final withholding tax
certain internal accounting adjustments and some fees charged by financial institutions

Do not assume an expense is exempt because it feels unusual. KRA publishes the exempt categories, and the Commissioner can also exempt specific cases. Everything else your business buys, from stationery and fuel to rent, repairs, consultancy and transport, generally needs a valid eTIMS invoice.

The eTIMS Solutions: Which One Fits Your Business?

KRA offers several eTIMS solutions. According to KRA’s onboarding guidelines, each has its own eligibility criteria. Choosing the right one saves a lot of frustration.

eTIMS Lite (web and USSD)

Who it’s for: non-VAT taxpayers, including small and micro businesses, selling goods, services or both, with no other active eTIMS solution.
How it works: on the web through eCitizen (ecitizen.kra.go.ke), or on any mobile phone by dialling *222#.
Good for: kiosks, artisans, small traders, freelancers and anyone who raises a handful of invoices and works mostly from a phone.

eTIMS Online Portal

Who it’s for: taxpayers supplying services only (no goods) who issue no more than 10 invoices a month.
Good for: small consultancies and professionals with a few clients.

eTIMS Client (Windows, Android, tablet and PDA)

Who it’s for: businesses selling goods, services or both that do not have their own invoicing system.
Windows version: needs Windows 10 (version 10.0.17 or later), at least 2 GB RAM and 20 GB storage. It is not compatible with Mac computers.
Android version: suited to small service businesses, with no stock management. It needs Android 8.0 or later and at least 8 GB storage.

OSCU and VSCU (system-to-system integration)

Who it’s for: businesses that already invoice through accounting, POS or ERP software and need it to talk directly to eTIMS.
OSCU (Online Sales Control Unit) suits systems that are always online.
VSCU (Virtual Sales Control Unit) suits bulk invoicing and systems that are not always online.
KRA publishes a list of approved third-party integrators, and businesses can also integrate themselves.

A quick way to decide:

Already using accounting or POS software for invoices? Look at OSCU or VSCU integration, so you don’t invoice twice.
Non-VAT, small, mostly on a phone? Start with eTIMS Lite via *222# or eCitizen.
Services only, ten invoices a month or fewer? The Online Portal may be enough.
Selling goods with no system? Consider the eTIMS Client.

How to Register for eTIMS: Step by Step

The exact screens change from time to time, so follow KRA’s current user guide for your solution. The general process is:

Check your KRA PIN and obligations on iTax. Make sure your PIN is active and your business details are correct. Problems here will follow you into eTIMS.
Choose your eTIMS solution using the criteria above.
Sign up on the eTIMS portal (or on eCitizen or *222# for eTIMS Lite) using your PIN. You will usually receive a one-time password on the phone number registered with KRA, so make sure that number is current.
Submit the requested details and documents. Depending on the solution, this may include your ID, business registration details and a description of what you sell.
Wait for approval and activation, then install or open the solution and log in.
Set up your items or services and customers before you start invoicing. A clean item list makes every later invoice faster and more accurate.
Issue a test invoice and confirm it appears correctly before you rely on the system for real sales.

How to Generate an eTIMS Invoice

Again, the details depend on the solution, but the steps follow the same pattern:

Log in to your eTIMS solution (dial *222#, open eCitizen, the portal, the client or your integrated system).
Choose to create a sales invoice.
Enter the buyer’s KRA PIN where the buyer is a business. This is what lets the buyer claim the expense. The PIN requirement has some exceptions, for example for certain sales to final consumers, so follow the prompts and current KRA guidance.
Select or enter the items or services, quantities and prices.
Check the totals, including any VAT if you are VAT-registered.
Submit. The invoice is transmitted to KRA and given a unique reference.
Share the invoice with your customer (print, PDF, SMS or email, depending on the solution), and keep your own copy.

When you buy, check every supplier invoice the same way you would check a cheque: correct PIN, correct amounts, and a genuine eTIMS reference that you can verify with KRA’s invoice checker. A fake or wrongly addressed invoice is as useless for deductions as no invoice at all.

Credit notes and corrections

If you make a mistake, or a customer returns goods, don’t simply ignore the original invoice. eTIMS provides for credit notes against an earlier invoice. Issuing them properly keeps your sales figures, VAT and income tax records consistent with what KRA sees.

Reverse Invoicing: Buying From Farmers and Informal Suppliers

Many businesses buy from people who will never install software: smallholder farmers, fishermen, artisans and informal traders. For these cases KRA allows reverse invoicing, where the seller gives consent for the buyer to generate the eTIMS invoice on the seller’s behalf.

If you buy produce or services from many small suppliers, reverse invoicing can be the difference between expenses you can claim and expenses you can’t. Set it up deliberately: get each supplier’s consent, record their PIN or identity details as required, and keep supporting records of the purchase.

Common eTIMS Mistakes That Cost Kenyan Businesses Money

Paying suppliers without asking for an eTIMS invoice. The most expensive mistake, because the cost may not be deductible.
Invoices without your PIN. If the supplier leaves out your PIN, the expense may not be linked to you.
Using the wrong solution. For example, a goods business on the services-only online portal, or a business with accounting software invoicing manually in a second system.
Invoicing twice. Issuing a manual invoice and a separate eTIMS invoice for the same sale, with different numbers and amounts.
Letting sales and eTIMS drift apart. If your M-Pesa and bank receipts show more sales than eTIMS, KRA will notice. Our guide to reconciling M-Pesa, bank and eTIMS figures shows how to keep them aligned.
Ignoring credit notes. Cancelled or corrected sales left in the system inflate your declared income.
Outdated KRA contact details. One-time passwords go to the phone number on your PIN. If it belongs to a former employee, registration and log-ins stall.
No backup plan for outages. Systems go down. Keep evidence of downtime (screenshots, ticket numbers) and follow KRA’s guidance for invoicing once the system is restored.

Penalties for Not Using eTIMS

The Tax Procedures Act provides penalties for failing to issue electronic tax invoices, and the bigger cost for most businesses is indirect: disallowed expenses, higher tax, and problems with a Tax Compliance Certificate when returns don’t reconcile. Under the Finance Act 2026, KRA has said that where a taxpayer fails to issue electronic invoices, file electronically or pay electronically, it will first issue a notice and consider the taxpayer’s explanation before applying a penalty. That is a fairer process, but the safest position is not to need it.

A Practical eTIMS Checklist

When you start

Confirm your PIN, obligations and phone number on iTax.
Choose the right eTIMS solution and register.
Set up your items, services and regular customers.
Tell your regular suppliers that you need eTIMS invoices with your PIN on every purchase.

Every week

Issue an eTIMS invoice for every sale, at the time of sale.
Check supplier invoices received that week, and chase any missing ones while the payment is fresh.
Issue credit notes for returns and corrections.

Every month

Reconcile eTIMS sales with your M-Pesa, till and bank receipts.
Compare purchase invoices on eTIMS with your expense records, and list any expenses without eTIMS support.
File VAT or turnover tax returns using figures that match eTIMS.

At year end

Match your income tax return to eTIMS, withholding tax and customs data before you file.
Declare any legitimate non-eTIMS expenses in the dedicated iTax section, with supporting documents ready.
Review which suppliers repeatedly fail to give eTIMS invoices, and decide whether to keep using them.

Good invoicing habits are really good bookkeeping habits. If your business shows a profit but never seems to have cash, eTIMS records are often the first place the gap appears, as we discuss in your business is making money, so why do you still feel broke? Our earlier introduction to eTIMS for Kenyan businesses is also a useful short read for staff who handle invoicing.

eTIMS, KRA’s AI Assistant and Getting Help

KRA has invested in self-help tools, including user guides for each eTIMS solution and its AI assistant, Shuru, which can answer general questions. We looked at what Shuru can and cannot do in meet Shuru, KRA’s new AI tax agent. These tools are useful for “how do I” questions. They are less useful for “what should my business do” questions, such as which solution suits a mixed goods-and-services business, or how to handle years of purchases without eTIMS invoices.

Remember too that compliance is not the same as financial health. A business can issue perfect eTIMS invoices and still struggle, as we explained in why KRA compliance is not the same as business health.

Frequently Asked Questions About eTIMS in Kenya

Is eTIMS mandatory for non-VAT businesses?

Yes. Section 23A of the Tax Procedures Act applies to every person carrying on business, and KRA’s eTIMS Lite solution was designed specifically for non-VAT taxpayers. Being off the VAT register does not take you out of eTIMS.

How do I generate an eTIMS invoice on my phone?

If you are a non-VAT taxpayer, eTIMS Lite lets you invoice from any phone by dialling *222#, or through the eCitizen website. Follow the prompts to enter the buyer’s PIN, the item or service and the amount, then submit.

Can I still claim an expense if my supplier didn’t give me an eTIMS invoice?

Generally, expenses need an eTIMS invoice to be deductible, unless they fall into an exempt category. KRA has provided a way to declare legitimate non-eTIMS expenses in a dedicated section on iTax, but you must provide the transaction details and be able to support them. The better fix is to get eTIMS invoices at the point of purchase.

Do I need eTIMS if I already have accounting software?

Yes, but you may not need a separate invoicing tool. If your software can integrate with eTIMS through OSCU or VSCU, your invoices can be transmitted directly, which avoids double entry. Ask your software provider or an approved integrator.

How do I check whether a supplier’s eTIMS invoice is genuine?

Use KRA’s invoice checker with the details on the invoice. Confirm the supplier’s name, your PIN and the amounts match before you record the expense.

Getting eTIMS Right

eTIMS in Kenya is no longer a box to tick. It decides which of your sales KRA already knows about, which of your expenses count, and whether your returns will pass validation. The businesses that cope most easily treat it as part of their daily routine: invoice every sale, insist on valid invoices for every purchase, and reconcile monthly.

If you would like help choosing an eTIMS solution, cleaning up supplier invoices or reconciling eTIMS with your books before filing, Taxmart Kenya’s tax consultancy services cover eTIMS onboarding and compliance reviews. Our accounting and bookkeeping services can keep your eTIMS records and your books in step every month.

Talk to Taxmart Kenya
📞 +254 727 434 740
📧 admin@taxmartkenya.co.ke
📍 Panari Sky Centre, Ground Floor Suite No. 1H, Mombasa Road, Nairobi
Or reach us through our contact page to book an eTIMS review.

This article is general information, not tax advice for your specific situation. eTIMS rules, exemptions and deadlines change; confirm current requirements on the KRA eTIMS portal, iTax or with a qualified adviser before acting.

eTIMS in Kenya: The Complete Guide for Businesses (2026)