The short version: eTIMS is the Kenya Revenue Authority’s electronic invoicing system, and if you run a business in Kenya (or work with contractors and suppliers who do) you now issue every sales invoice through it, not on a till roll or a Word template. You register on iTax, pick the right eTIMS option for the size of your business, and every invoice you create gets a KRA-generated number, a QR code, and gets sent to KRA’s servers in real time. Skip it and you cannot claim the expense for tax purposes and you risk a penalty of KES 1,000,000 or double the tax due, whichever is higher.
What eTIMS replaced
Before eTIMS, Kenyan VAT-registered businesses used physical Electronic Tax Registers, the same kind of till machine you have probably seen behind a supermarket counter, printing a paper receipt with a tax PIN stamped at the bottom. Those machines needed a technician to install, cost money to maintain, and did nothing for anyone who invoiced remotely, a freelance designer working from a laptop, a consultant billing by email, a landlord issuing a monthly rent invoice.
KRA replaced that whole approach with eTIMS, the electronic Tax Invoice Management System, rolled out fully through 2023 and 2024. Instead of a till, you invoice through software, a web portal, a mobile app, or a USSD code, and the invoice data goes straight to KRA the moment you create it. No more end-of-month reconciliation nightmares where the till total does not match what got declared.
Who has to use it
The rule that catches people out is this: it is not just VAT-registered companies. Since the Finance Act changes, any resident taxpayer carrying on business in Kenya needs to issue eTIMS invoices, including businesses below the KES 5,000,000 VAT registration threshold. A sole trader turning over KES 800,000 a year, a small salon, a one-person consultancy, they all need to be on eTIMS now, because the buyer’s ability to claim the expense against their own tax depends on receiving a proper eTIMS invoice from you.
That last point is the one that forces compliance. It used to be that a small supplier could stay under the radar because nobody chased them. Now their bigger customers chase them, because if the customer cannot get an eTIMS invoice for the purchase, the customer loses the tax deduction. So the pressure to register comes from your clients, not just from KRA.
The four ways to invoice through eTIMS
KRA built several onboarding routes so nobody has an excuse about equipment or cost. Pick based on how you invoice today.
- eTIMS Web: the free browser-based option through iTax. No download, no cost, works for anyone issuing a handful of invoices a month. Best for freelancers, consultants, small service businesses.
- eTIMS Client: desktop software you install, meant for businesses already running accounting packages like Sage or Zoho that need to integrate invoicing with stock and accounts. This connects through what KRA calls a Virtual Sales Control Unit.
- eTIMS Lite: a lighter mobile app and simplified web version aimed at sole traders, landlords, and small shops that do not want software but need something more mobile than the full web portal.
- USSD via *222#: for feature phone users with no smartphone or reliable internet, a important option for market traders and small rural businesses. You dial the code, enter buyer details and amount, and get a reference number back by text.
Most people I speak to over-complicate this decision. If you send fewer than fifty invoices a month and you are not already inside a big accounting system, eTIMS Web on its own does the job. Nobody needs to pay a third party for software integration at that volume, and I will come back to why that matters.
Step by step: registering and sending your first invoice
Here is the actual sequence, the way I walked a client through it myself:
- Log into iTax with your KRA PIN and password. If you do not have an iTax account yet, that comes first, before anything eTIMS related.
- Inside iTax, go to the e-Invoicing or eTIMS registration section and select your taxpayer category, VAT registered or non-VAT registered.
- Choose your onboarding route (Web, Client, Lite, or USSD) based on how you invoice day to day.
- For Web and Lite, you register the device or browser instance and KRA sends an activation code by SMS or email. Enter it to link the software to your PIN.
- Create your first invoice: buyer name, buyer KRA PIN (required for business-to-business sales, not required for a walk-in cash customer under the retail threshold), item description, quantity, unit price, and VAT category, 16 percent standard, 8 percent, zero-rated, or exempt.
- Submit. The system instantly assigns a Control Unit Invoice Number and generates a QR code. This is not optional and cannot be edited afterwards, so check the numbers before you hit submit.
- Send the PDF or printed copy to your buyer. They can scan the QR code to verify the invoice is real on the KRA portal, which matters more than people think when you are dealing with a new client who wants proof before paying.
- The transaction data feeds automatically into your VAT return, so at month end there is far less manual entry than the old ETR process.
What it costs you if you skip it
The penalty for failing to comply is KES 1,000,000 or double the tax due on the transaction, whichever figure is bigger. That is not a slap on the wrist, that is a business-ending number for most small traders. On top of that, if you buy goods or services from a supplier who has not issued you an eTIMS invoice, you lose the right to claim that cost against your own income tax, which quietly increases your tax bill without any penalty notice at all, because it just shows up as a disallowed expense when your accountant does the return.
What happened with my Nairobi contractor’s invoice
I run a small team across a few countries and one of the people who has worked with me longest is a data and research contractor based in Nairobi. In February she emailed to say her February invoice would be late, not because the work was late, but because her old ETR till roll had lapsed and the eTIMS Client software kept rejecting the transaction because her buyer PIN field, which was my company’s Israeli registration number entered in the wrong format, did not match what the system expected for a foreign buyer.
It took her three days to
