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The Evolution of e-TIMS

In 2016, the Authority discovered that taxpayers were claiming input VAT despite the absence of genuine purchase documents. Investigations revealed that some taxpayers did, in fact, issue tax invoices as a part of their company.

These ‘missing trader’ fraud cases sparked a demand for a solution that could close these gaps and increase accountability.

Responding to this, the KRA introduced the Tax Invoice Management System (TIMS) on 1st August 2021, with a grace period extending to 31st July 2022. TIMS, a device-based innovation, mandated VAT-registered businesses to integrate Electronic Tax Register (ETR) machines with their billing systems, ensuring every invoice was accounted for.

Recognizing the need for greater flexibility, the KRA through a public notice dated 28th February 2023, informed the public of the commencement of phase two of the Tax Invoice Management System eTIMS—a software alternative to TIMS. This advancement allowed for invoice management through a range of electronic devices, including computers and mobile apps, marking a significant leap in technological convenience and user experience.

Recent Changes on the e- Tims regime under the Finance Act 2023

On 1st September 2023– The e-TIMS compliancewhich was previously focused on VAT registered individuals became mandatory for all businesses. To this effect, all businesses, including those that are not registered for VAT are mandated to electronically generate and transmit their invoices via eTIMS.

Beginning 1st January 2024 – Any expenditure where the invoices of the transactions are not generated via an electronic tax invoice management system shall not be allowed forCorporate Income Tax  deduction against revenue.

What we expect to be the implementation issues / challenges

The challenges we expect with the eTIMS implementation are onboarding all businesses on to eTIMS and ensuring all businesses comply by the 1st January 2024.Small businesses may also have challenges purchasing the necessary machines like computers and smartphones that can enable them generate eTIMS invoices. Also, during power outages, there will be a challenge purchasing or selling as businesses without power generators will not be able to generate eTIMS invoices.

Should you have any questions on this or any other tax matters, we are happy to partner with you to enhance your tax compliance . Please feel free to reach out to us through the undersigned contacts.

For more information, please contact us at


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