Background

On 7^th November 2023, Kenya Revenue Authority (KRA), pursuant to the Finance Act 2023 amendment of Section 23A of the Tax Procedure Act 2015 providing for electronic tax invoices, issued a Public Notice about onboarding of Non-VAT Taxpayers on eTIMS. This provision now expands the scope of electronic tax invoices to include all taxpayers conducting business in Kenya, including small businesses and roadside traders.

The law requires that for any person to claim their business expense, the expense must be supported by an electronic tax invoice. Therefore, all persons engaged in business are required to issue electronic tax invoices, whether registered for VAT or not (non-VAT taxpayers)

The cost of non-compliance is a high price to pay that can easily be avoided by seeking expert advice.

The difference between TIMS & eTIMS

Tax Invoice Management System (TIMS) is a hardware-oriented solution requiring taxpayers to use Electronic Tax Register (ETR) machines for generation and transmission of invoices.  However, Electronic Tax Invoice Management System (eTIMS) is an online solution tailored to enhance seamless convenience for taxpayers.  It can be accessed through mobile phones, desktop computers, tablets and laptops.  It is an alternative to TIMS offering technological and mobile convenience.

Who are exempt from the provisions of applying for eTIMS?

Non-resident suppliers of digital services but must provide invoices or receipts for value added tax charged. Additionally, the suppliers of the following goods and services:
a) Emoluments
b) Imported goods and services.
c) Interest Investment Allowances
d) Airline Passenger Ticketing
e) Any other person granted exemption by the Commissioner

eTIMS Solutions

1. Online Portal – Tailored for taxpayers in the service sector exclusively, where no goods are supplied. Accessible from anywhere via any device, provided there is internet.
2. eTIMS Client – A downloadable software designed for taxpayers dealing in goods or both goods and services. The software supports multiple branches and pay points/cashier tills. It is device specific, configured by KRA.
3. Virtual Sales Control Unit (VSCU) – This solution enables seamless system-to-system integration between the taxpayer’s invoicing/ERP system and eTIMS, catering to taxpayers with extensive transactions or bulk invoicing.
4. Online Sales Control Unit (OSCU) – This solution also facilitates system-to-system integration between the taxpayer’s invoicing/ERP system and eTIMS. It is ideal for taxpayers using an online invoicing system.
5. eCitizen – An option similar to both Online Portal and eTIMS Client.
6. USSD – Via *222# that targetted mainly those in business in the informal sector such as Mama Mboga, Boda Boda rider, etc.

Improvements in 2025

1. Taxpayers can now use the different eTIMS solutions simultaneously to generate invoices at their convenience. For instance, taxpayers using eTIMS Client as their primary invoicing solution can now add the online portal as a secondary invoicing option and vice versa.
2. eTIMS now allows taxpayers to access all invoices generated from different eTIMS solutions such as eTIMS Client, System to System integration solutions (VSCU & OSCU) and the eCitizen portal through the online taxpayer portal. Each solution will have its own invoice sequence to keep every invoice unique. However, credit notes are still to be raised in the solution that the original invoices were raised in.
3. Taxpayers using the System to System integration approach as their primary solution can now integrate with more than one third-party integrator. This flexibility allows taxpayers to add a secondary device from another integrator by adding a branch under the Device Management section accessed through their online portal.