eTIMS Complete Guide Kenya 2026 — Registration, Invoicing & Compliance

What is eTIMS?

eTIMS (Electronic Tax Invoice Management System) is KRA's mandatory electronic invoicing system. Every business in Kenya must issue tax invoices through eTIMS — whether you sell goods or services, are VAT-registered or not.

The system ensures that all business transactions are captured by KRA in real time. Every invoice you issue is transmitted to KRA and assigned a unique control number.

Who Must Use eTIMS?

Everyone. As of 2024, eTIMS is mandatory for:

• -All VAT-registered businesses
• -All income tax-registered businesses (including turnover tax payers)
• -All businesses selling goods or services, regardless of size
• -Professionals (doctors, lawyers, consultants, etc.)
• -Landlords receiving rental income

Exemptions are very limited — only businesses dealing exclusively in exempt supplies (like unprocessed agricultural produce sold at farm gate) may be exempt.

eTIMS Solutions — Which One Do You Need?

KRA offers several eTIMS solutions depending on your business size:

For most small businesses, the free eTIMS Lite (Web) portal or USSD (*222#) is sufficient. The USSD option is critical for the informal sector — you can generate invoices from any basic phone without internet access.

Important: January 2026 Validation Change

From 1 January 2026, KRA cross-validates ALL income and expenses declared in tax returns against eTIMS records. This means:

• -Every shilling of expense must be backed by an eTIMS invoice
• -Unsupported expenses are treated as taxable profit
• -KRA can now automatically flag discrepancies between your returns and eTIMS data

This is the biggest enforcement change since eTIMS launched. If you buy KES 1,000,000 of stock without eTIMS invoices, KRA will disallow the expense — adding KES 300,000 to your tax bill (at 30%).

Reverse Invoicing — For Small Suppliers

If your supplier has turnover below KES 5 million and cannot issue eTIMS invoices, you (the buyer) can generate the invoice on their behalf through a process called reverse invoicing:

• -. Log into eCitizen or use USSD (*222#)
• -. Create an invoice on behalf of your supplier
• -. The supplier receives an SMS to approve the invoice
• -. Once approved, you can claim the expense as a deduction

This is particularly important for businesses buying from informal traders, farmers, or small suppliers who haven't registered for eTIMS.

How to Register for eTIMS — Step by Step

Step 1: Get your KRA PIN You need an active KRA PIN. If you don't have one, register at itax.kra.go.ke.

Step 2: Register on eTIMS - Go to **etims.kra.go.ke** - Click "Sign Up" or "Register" - Enter your KRA PIN and phone number - You'll receive an OTP to verify your identity - Complete the registration form with your business details

Step 3: Configure your business - Add your business name and address - Set up your product/service categories - Add your bank details (for receipts) - Configure tax rates (16% standard, 0% zero-rated, exempt)

Step 4: Start issuing invoices - Log in to the eTIMS portal - Click "Create Invoice" - Enter buyer details (their KRA PIN if B2B) - Add line items with quantities and prices - The system calculates VAT automatically - Submit — the invoice is transmitted to KRA in real time

eTIMS Invoice Requirements

Every eTIMS invoice must contain:

• -Your business name, address, and KRA PIN
• -Buyer's name and KRA PIN (for B2B transactions above KES 50,000)
• -Invoice date and unique invoice number
• -Description of goods/services
• -Quantity, unit price, and total amount
• -VAT amount (broken out separately)
• -eTIMS control number (assigned by the system)
• -QR code for verification

Penalties for Non-Compliance

KRA takes eTIMS compliance seriously:

• -Not registered on eTIMS: Your purchases won't be allowable as business expenses for tax purposes
• -Not issuing eTIMS invoices: Penalties under the Tax Procedures Act — up to KES 1,000,000 or imprisonment
• -Buying without eTIMS invoices: You cannot claim input VAT or deduct the expense from your taxable income

The biggest practical impact: If you buy goods or services from a supplier who doesn't give you an eTIMS invoice, you cannot claim that expense when calculating your taxes.

Common Problems and Solutions

"eTIMS is too complicated for my small business" Use eTIMS Online — it's free and works like filling in a form. You don't need special software or hardware.

"I have no internet at my business location" Use the eTIMS Taxpayer desktop app — it works offline and syncs when you're back online. Or use your phone as a hotspot.

"I issue hundreds of invoices daily" You need either OSCU (hardware) or VSCU (software API). These integrate with your existing POS or ERP system and auto-transmit invoices.

"My customers don't have KRA PINs" For B2C transactions (sales to individuals), you can issue invoices without the buyer's KRA PIN. The PIN is only required for B2B transactions above KES 50,000.

"I'm on turnover tax — do I still need eTIMS?" Yes. All businesses must use eTIMS, including TOT taxpayers. Your invoices will show 0% VAT since TOT payers are not VAT-registered.

eTIMS Tips for Small Businesses

• -Keep a separate phone number for eTIMS — you'll receive OTPs and notifications
• -Issue invoices at point of sale — don't batch them at the end of the day (KRA tracks timing)
• -Keep copies of all invoices — eTIMS stores them online, but keep your own backups
• -Check your suppliers — ask for eTIMS invoices when buying stock, or you lose the tax deduction
• -Register early — avoid the rush before deadlines when KRA servers slow down