Understanding eTIMS in Kenya

By FNJ & Associates | Last updated: 30 October 2026

eTIMS meaning. eTIMS stands for electronic Tax Invoice Management System, KRA’s platform for issuing tax invoices electronically. Every business, whether or not it is registered for VAT, must issue invoices through eTIMS, and KRA uses the invoice data to check the income and expenses declared in tax returns. An expense without an eTIMS invoice can be disallowed.

Item	Detail
Full name	electronic Tax Invoice Management System
Run by	Kenya Revenue Authority (KRA)
Who must use it	Every person in business, VAT-registered or not
Ways to issue invoices	Online portal, eTIMS client, system integration (VSCU or OSCU), simplified options such as USSD and eCitizen, and ETR devices
What it affects	Expenses are deductible, and input VAT claimable, only with an eTIMS invoice
Excluded	Employment income, imports, interest from financial institutions, investment allowances, airline tickets and payments subject to final withholding tax
Buyer-initiated invoicing	For suppliers with turnover of KES 5 million or less that are not VAT-registered
Penalty for not using it (Finance Act, 2026)	Higher of 5% of the tax due, or KES 100,000 for companies and KES 10,000 for individuals

New to Kenyan taxes? Start with our overview of the types of taxes in Kenya, with every main rate and deadline in one table.

The Electronic Tax Invoice Management System (eTIMS in Kenya) is an essential tool implemented by the Kenya Revenue Authority to promote transparency in tax invoicing.

This article provides insights into the structure, exemptions, and compliance requirements of eTIMS in Kenya, to aid organizations in maintaining adherence.

What is eTIMS in Kenya?

The electronic Tax Invoice Management System (eTIMS) is KRA’s software system designed to facilitate electronic invoicing. It enables the generation and management of tax invoices digitally.

What are the Available eTIMS Solutions in Kenya?

eTIMS provides various solutions to accommodate different business needs. These solutions include:

Device-Based Approach (ETR): This was the first solution to be rolled out. The high compliance costs associated with the solution led to the development of software-based alternatives highlighted below.
Online Portal: Suitable for taxpayers with minimal transactions.
eTIMS Client: A downloadable software accessible on multiple devices, such as laptops, computers, tablets, phones etc.
System-to-System Integration Solutions (VSCU/OSCU): Involves integrating with existing software billing systems or ERPs. Virtual Sales Control Unit (VSCU) is implemented/hosted on the client side and is best suited for organizations with large volumes of invoices that need to be generated over a short period of time. Online Sales Control Unit (OSCU) is implemented and hosted at KRA and is best suited for systems that operate online.
Simplified Solutions: Primarily used by MSMEs and they include USSD, eCitizen portal, and eTIMS Lite mobile app. VAT taxpayers are also able to onboard and invoice via the eCitizen portal.
Reverse Invoicing & Buyer-Initiated Invoicing: Allows the buyer to generate a tax invoice on behalf of a small-scale seller.

It is worth noting that recent enhancements to eTims in Kenya have made eTims implementation simpler – these enhancements include; online eTIMS registration that does not require document uploads, auto-approval of service requests made by taxpayers, ability to onboard on multiple channels, among others.

What are the key legal requirements on eTims in Kenya?

The current framework in Kenya requires all taxpayers with business income to support expenditure using electronic tax invoices. A tax invoice for VAT purposes must be generated through electronic Tax Management System (eTIMS). In addition, tax invoices should be issued for both taxable and exempt supplies. Other related legal provisions include exclusions or exemptions from electronic invoicing and stock management, as well as penalties for non-compliance.

What is an eTIMS Receipt or Invoice?

An eTIMS receipt or invoice is a digital tax document that records sales made to customers. The key features of a valid invoice include;

PIN of the seller.
PIN of the buyer (required where the buyer is a business that will claim the expense or input VAT; optional for sales to final consumers).
Date and time stamp.
Description of supply and quantity (not generic).
QR code.
Control Unit Serial number.
Control Unit Invoice number.
Item Code (if applicable).
Taxable value.
Tax rate and total tax amount (where applicable).
Total gross amount.

Invoices can be verified by scanning the QR code or using the invoice number checker online.

What is Reverse Invoicing and Buyer-Initiated Invoicing?

These are additional solutions introduced to address the needs of small businesses, including farmers, constrained by electronic invoicing. Both allow the buyer to generate the invoice on behalf of the seller. Buyer-initiated invoicing is accessible to all taxpayers via the eCitizen platform or USSD. Reverse invoicing requires system-to-system integration with eTIMS.

What are the Exemptions for eTIMS in Kenya?

The following transactions are excluded from eTIMS implementation in Kenya:

Employment income (emoluments) taxed through PAYE.
Imports of goods, which are documented through customs entries.
Interest income from financial institutions.
Investment allowances under the Income Tax Act.
Airline passenger ticketing.
Payments subject to final withholding tax.
Any other transaction exempted by the Commissioner in accordance with the law.

What has changed in 2026?

From 1 January 2026, KRA validates the income and expenses declared in tax returns against eTIMS invoices, withholding tax records and customs data, so expenses without a matching eTIMS invoice are likely to be queried. The Finance Act, 2026, effective 1 July 2026, also tightened the penalty for failing to issue invoices through eTIMS, while allowing KRA to waive penalties and interest where the failure is caused by errors in its own systems. Buyer-initiated invoicing remains available for suppliers with annual turnover of KES 5 million or less, but not for VAT-registered sellers, and the seller has 30 days to accept an invoice raised on its behalf.

Our tax and KRA services page sets out how we prepare returns, manage tax compliance and support clients through KRA reviews.

Frequently Asked Questions

What does eTIMS stand for?

Electronic Tax Invoice Management System. It is the system KRA uses for issuing and recording tax invoices.

Do non-VAT registered businesses need eTIMS?

Yes. Every person in business must issue invoices through eTIMS, whether or not they are registered for VAT.

What is the difference between an eTIMS invoice and an eTIMS receipt?

Both are issued through eTIMS. An invoice to a business carries the buyer’s PIN so the buyer can claim the expense or input VAT; a receipt to a consumer can leave the buyer’s PIN out.

What is the penalty for not using eTIMS?

Under the Finance Act, 2026, the higher of 5% of the tax due, or KES 100,000 for a company and KES 10,000 for an individual.

In summary, understanding eTIMS in Kenya is critical in enhancing the overall tax compliance by organizations. This article has provided a general eTIMS guide for information purposes. At FNJ & Associates, we offer professional expert advisory to ensure your organization remains up-to-date and compliant with these evolving requirements. Contact us for tailored support on eTIMs and other tax strategies.

If you run a small or growing business, see our accounting services for SMEs in Kenya, from bookkeeping and tax to payroll and audit.

Disclaimer

This article is general information based on Kenyan tax law and KRA guidance as at 23 October 2026. It is not tax, legal or financial advice, and rates, thresholds and deadlines change, often through the annual Finance Act. Confirm the current position with KRA or speak to FNJ & Associates before acting. FNJ & Associates accepts no liability for decisions made on the basis of this article.