Which Kenyan transactions need an eTIMS invoice
Which of a Kenyan business's sales and purchases need an eTIMS invoice, which transactions the law excludes, and how to find the gaps each month.
By Achekam · · 5 min read · For Running a business businesses in Kenya
Kenya's e-invoicing rule fits in one line: a business issues its tax invoices through KRA's eTIMS system. Applying it is another matter. Open a month of transactions and go down the list. Salaries. Interest on the overdraft. A container of stock cleared through Mombasa. A flight to see a customer in Kisumu. A trainer paid after deducting withholding tax. Which of these should have an eTIMS invoice behind it, and which did the law never expect to have one?
The answer matters on both sides of the books. A sale without an eTIMS invoice breaks the issuing rule. A purchase that needed one and does not have it can cost you the income tax deduction for that expense.
This article sorts the ordinary run of business transactions into "needs eTIMS" and "excluded", and sets out a short monthly check you can run on your own records.
The starting point: every business issues electronic invoices
Section 23A of the Tax Procedures Act requires every business in Kenya to issue electronic tax invoices through eTIMS and to keep stock records. The rule is written for every business, so do not assume it stops at VAT registration or at a certain size.
For your sales, that makes eTIMS the default. When you sell goods or services, assume the customer should receive an eTIMS invoice unless the transaction falls into one of the excluded categories below. When you buy, assume the supplier should give you one, for the same reason.
The stock-records half of the rule is easy to forget. A business that sells goods is expected to keep stock records alongside its invoices, so a shop that issues eTIMS invoices but never counts its shelves has only done half the job.
What the law leaves out
The exclusions include:
- employment income: the salaries and wages you pay your staff;
- imports;
- interest;
- airline tickets;
- payments subject to withholding tax.
These are the main categories the research behind this article identified, introduced as exclusions that "include" them. Treat the list as the common cases rather than a complete catalogue. The full wording sits in the Tax Procedures (Electronic Tax Invoice) Regulations, which set out who must issue electronic tax invoices, what an invoice must contain, how invoices reach KRA, the stock records to keep and the transactions excluded from eTIMS. Read them, or ask your tax adviser, before you decide that an unusual payment is outside the system.
Staff pay, imports and interest
Your payroll is not invoiced. The evidence for salaries is the payroll itself: the approved pay run, the payslips and the monthly PAYE return. Imports carry their own customs paperwork. Interest on a loan or an overdraft is supported by the loan agreement and the bank statement. None of these will come with an eTIMS invoice, and you should not waste time chasing one.
Air travel
An airline ticket for a business trip falls on the excluded list. Keep the ticket, the booking confirmation and a note of the business purpose with the expense claim. Note the narrowness of the exclusion: it names airline tickets. The taxi to the airport and the hotel at the other end are ordinary purchases, and the question of an eTIMS invoice applies to them as it does to any other supplier.
Payments that bear withholding tax
When you pay a resident consultant a management, professional or training fee, you deduct withholding tax at 5% at the time of writing (20% for a non-resident) and remit it to KRA. Payments subject to withholding tax are among the exclusions. Keep the payee's invoice, your calculation of the tax deducted and the proof of remittance together. How much to deduct, and when to pay it over, is covered in deducting withholding tax from Kenyan suppliers.
Why your suppliers' invoices matter to your tax bill
Since 1 January 2024, Kenyan business expenses not supported by an eTIMS invoice are disallowed for income tax. From the 2026 year of income, every expense needs one.
Put those two rules beside the exclusions and each purchase in your books faces one question. Is it on the excluded list? If it is not, where is its eTIMS invoice? A cleaning contract, fuel, stationery, repairs, rent from a business landlord, a software subscription from a Kenyan reseller: none of these is excluded, so each needs the supplier's eTIMS invoice before you can count on deducting it.
What happens to expenses without one, and how to deal with suppliers who cannot issue them, is the subject of supplier invoices without eTIMS.
How Achekam handles both sides
Sales. Achekam does not yet send invoices to eTIMS itself. You issue the invoice through another eTIMS channel, such as eTIMS Lite, eTIMS Client or a third-party integrator, and then record what eTIMS gave back in Achekam: the control-unit invoice number, the internal data and the receipt signature. A second person verifies those details. Only then does Achekam treat the invoice as fiscalised.
Purchases. Achekam lists your supplier invoices that have no eTIMS reference recorded, so you can see which expenses risk being disallowed. Recording the reference when you enter the supplier's bill keeps that list honest. If you also enter excluded items as supplier bills, such as an airline ticket, decide in advance how you will note why they carry no reference, so that whoever reviews the list does not chase a supplier for nothing.
A monthly check for gaps
Run this after the month's purchases are entered, well before the VAT return or the year-end computation:
- Open the list of supplier invoices with no eTIMS reference.
- Mark each line that belongs to an excluded category (staff costs, imports, interest, airline tickets, payments subject to withholding tax) and note why.
- For every other line, look at the supplier's paperwork. If an eTIMS invoice exists, record its reference.
- If it does not exist, ask the supplier for one now, while the supply is recent.
- Note any supplier who cannot issue eTIMS invoices, and decide whether to keep buying from them.
- On the sales side, check that every invoice you issued last month has its eTIMS details recorded and verified.
A short session on that list each month is far cheaper than discovering at year end that a regular supplier never issued a single valid invoice. On the sales side, the VAT return is where gaps surface; see unfiscalised sales on a Kenyan VAT return.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
