\n| System-to-System Integration<\/td>\n | Integration costs vary<\/td>\n | IT team or certified integrator<\/td>\n | Days to weeks<\/td>\n | Large enterprises<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Important:<\/strong>\u00a0All KRA-provided eTIMS solutions are free. Third-party integrators may charge for setup and support.<\/p>\n<\/span>Step-by-Step Guide to Creating an eTIMS Invoice<\/span><\/h2>\n<\/span>Step 1:\u00a0Onboard<\/strong>\u00a0onto eTIMS.<\/span><\/h3>\nLog in to the KRA iTax Portal (itax.kra.go.ke) with your PIN and password. Navigate to the eTIMS section and complete the onboarding process by providing details about your business. KRA has eliminated the requirement for approval of applications, so you can self-onboard immediately.<\/p>\n <\/span>Step 2:\u00a0Choose<\/strong>\u00a0your eTIMS solution.<\/span><\/h3>\nSelect the solution that matches your business type. If you are non-VAT registered, choose eTIMS Lite via eCitizen, USSD *222#, or the mobile app. If you are VAT-registered, choose eTIMS Client or System-to-System Integration.<\/p>\n <\/span>Step 3:\u00a0Register<\/strong>\u00a0your items or services.<\/span><\/h3>\nOn the eTIMS portal, search for item classification using the UNSPSC code. Enter the name of your product or service, find the relevant classification code, and register the item.<\/p>\n PRO TIP:<\/strong>\u00a0Register all your common items once. You can then select them from the list for each invoice instead of typing details repeatedly.<\/p>\n<\/span>Step 4:\u00a0Create<\/strong>\u00a0a new sales receipt.<\/span><\/h3>\nNavigate to Transaction Management and select “Sales Receipt.” Click the add button to begin a new transaction.<\/p>\n <\/span>Step 5:\u00a0Enter<\/strong>\u00a0customer and transaction details.<\/span><\/h3>\nEnter the customer’s name and PIN if available. Provide the invoice date, description of goods or services, quantity, unit price, and VAT (16% for standard-rated supplies). The system will automatically calculate the total.<\/p>\n <\/span>Step 6:\u00a0Generate<\/strong>\u00a0and validate the invoice.<\/span><\/h3>\nClick Generate Invoice to process the transaction. The system automatically assigns a QR code for authenticity verification. This QR code is crucial for confirming that the invoice is compliant with KRA regulations.<\/p>\n PRO TIP:<\/strong>\u00a0Always verify that the buyer’s PIN is correct. KRA validates expenses using the buyer’s PIN, so an incorrect PIN means the expense cannot be claimed.<\/p>\n<\/span>Step 7:\u00a0Download<\/strong>\u00a0and share the invoice.<\/span><\/h3>\nClick the receipt option to generate the final document. Save the invoice as a PDF and email it to the customer, or print it using an eTIMS-compliant printer.<\/p>\n You have now completed generating an eTIMS invoice. Here is what to expect next: the invoice data is transmitted to KRA in real-time, and both you and your customer can verify its authenticity using the QR code.<\/p>\n <\/span>Common Mistakes to Avoid<\/span><\/h2>\nMISTAKE:<\/strong>\u00a0Issuing handwritten receipts instead of eTIMS invoices.
\nWHY IT HAPPENS:<\/strong>\u00a0Many small business owners are unaware that handwritten receipts are no longer valid for tax deduction.
\nTHE FIX:<\/strong>\u00a0Generate every invoice through eTIMS. If you cannot, use reverse invoicing to let your buyer issue the invoice on your behalf.<\/p>\nMISTAKE:<\/strong>\u00a0Forgetting to include the buyer’s PIN on the invoice.
\nWHY IT HAPPENS:<\/strong>\u00a0Businesses assume the invoice is valid without the buyer’s details.
\nTHE FIX:<\/strong>\u00a0Always capture the buyer’s PIN. Expenses must be supported by invoices transmitted with the buyer’s PIN. Without it, the expense is disallowed.<\/p>\nMISTAKE:<\/strong>\u00a0Not transmitting the invoice to KRA.
\nWHY IT HAPPENS:<\/strong>\u00a0Some businesses generate the invoice but fail to complete the transmission step.
\nTHE FIX:<\/strong>\u00a0Ensure the invoice status shows as “Transmitted” on the eTIMS portal. Un-transmitted invoices are not valid for expense claims.<\/p>\nMISTAKE:<\/strong>\u00a0Using the wrong eTIMS solution for your business type.
\nWHY IT HAPPENS:<\/strong>\u00a0Confusion between eTIMS Lite and eTIMS Client.
\nTHE FIX:<\/strong>\u00a0If you are non-VAT registered, use eTIMS Lite. If you are VAT-registered, use eTIMS Client or System-to-System Integration.<\/p>\nMISTAKE:<\/strong>\u00a0Assuming eTIMS only applies to VAT-registered businesses.
\nWHY IT HAPPENS:<\/strong>\u00a0Many non-VAT businesses believe they are exempt.
\nTHE FIX:<\/strong>\u00a0ALL persons engaged in business must issue electronic tax invoices, regardless of VAT status. This includes tutors, landlords, photographers, and hairdressers.<\/p>\nMISTAKE:<\/strong>\u00a0Failing to register items before creating an invoice.
\nWHY IT HAPPENS:<\/strong>\u00a0Users skip the item registration step and try to create invoices directly.
\nTHE FIX:<\/strong>\u00a0Register all your products or services in the system first. You cannot generate an invoice without registered items.<\/p>\nMISTAKE:<\/strong>\u00a0Not downloading the invoice receipt for your records.
\nWHY IT HAPPENS:<\/strong>\u00a0Rushing through the process or assuming the system stores everything.
\nTHE FIX:<\/strong>\u00a0Always download and save the PDF receipt. You will need it for audits and expense validation.<\/p>\nMISTAKE:<\/strong>\u00a0Issuing credit notes from a different solution than the original invoice.
\nWHY IT HAPPENS:<\/strong>\u00a0Businesses use multiple eTIMS solutions and assume credit notes can be generated from any.
\nTHE FIX:<\/strong>\u00a0Credit notes can only be generated from the solution where the original invoice was raised.<\/p>\n<\/span>Reverse Invoicing: The Game-Changer No One Is Talking About<\/span><\/h2>\nReverse invoicing is the most underrated feature of eTIMS, and most competitor guides completely ignore it. Under this system, a registered buyer can generate a tax invoice on behalf of a seller for goods or services received. This was introduced through the Tax Procedures (Amendment) Act, 2024.<\/p>\n Why does this matter? Consider a restaurant that buys vegetables daily from a mama mboga who has no PIN and cannot issue eTIMS invoices. Under normal rules, the restaurant cannot claim those expenses. But with reverse invoicing, the restaurant can issue the eTIMS invoice itself, provided the mama mboga gives consent. This brings the transaction into the tax net and allows the restaurant to claim the expense.<\/p>\n KRA has made the buyer-initiated invoicing solution accessible via ecitizen.kra.go.ke. To use it, the buyer logs in, selects “Reverse Invoicing,” enters the seller’s details (name, PIN if available), and generates the invoice. The seller receives a confirmation and the invoice is transmitted to KRA in real-time.<\/p>\n This solution is particularly valuable for businesses that rely on informal suppliers\u2014think jua kali artisans, farmers, transporters, and rural service providers. Instead of abandoning these suppliers for formal but more expensive alternatives, you can keep your supply chain intact while staying compliant.<\/p>\n The catch? The seller must consent to the arrangement. KRA requires that the seller gives authority to the buyer to issue invoices on their behalf. Without consent, reverse invoicing cannot be used. But for businesses with long-standing relationships with informal suppliers, this is a practical way to bridge the gap between informality and compliance.<\/p>\n <\/span>Future Trends in eTIMS Invoicing<\/span><\/h2>\nValidation Will Become Fully Automated<\/strong>
\nKRA’s validation of income and expenses against eTIMS records is already underway. By 2027, the system will likely validate returns in real-time, flagging discrepancies immediately. Businesses that do not adopt eTIMS will face automated penalties and compliance checks.<\/p>\neTIMS Will Expand to More Sectors<\/strong>
\nKRA is rolling out sector-specific solutions like the eTIMS Fuel Station System. Expect similar tailored solutions for agriculture, transport, and tourism in the coming years. These solutions will integrate with industry-specific systems to simplify compliance.<\/p>\nReverse Invoicing Will Become Mainstream<\/strong>
\nAs more businesses realise they can claim expenses from informal suppliers through reverse invoicing, adoption will surge. KRA is actively promoting this solution through taxpayer education and stakeholder engagements.<\/p>\nMobile Filing Will Dominate<\/strong>
\nWith eTIMS Lite available via USSD *222# and the mobile app, most small businesses will shift to mobile invoicing. This trend mirrors the broader shift toward mobile tax services in Kenya.<\/p>\nIntegration with Accounting Software Will Deepen<\/strong>
\nAccounting software providers in Kenya are increasingly building eTIMS compliance into their platforms. By 2027, most accounting systems will include built-in eTIMS integration, making invoicing and filing seamless.<\/p>\nQUICK POLL: Which eTIMS solution do you plan to use for your business? A) eTIMS Lite (Web\/eCitizen) B) eTIMS Lite (USSD *222#) C) eTIMS Client (Windows software) D) System-to-System Integration<\/p>\n <\/span>FAQ<\/span><\/h2>\nQ: How do I generate an eTIMS invoice in Kenya?<\/strong>
\nA: Log in to eTIMS via eCitizen (for non-VAT) or the eTIMS portal (for VAT-registered). Register your items, create a sales receipt, enter customer and transaction details, and click Generate Invoice. The system will assign a QR code and transmit the invoice to KRA in real-time.<\/p>\nQ: Is eTIMS mandatory for non-VAT registered businesses?<\/strong>
\nA: Yes. All persons engaged in business must issue electronic tax invoices, regardless of VAT status. This includes tutors, landlords, photographers, and hairdressers.<\/p>\nQ: What happens if I do not have an eTIMS invoice for my business expenses?<\/strong>
\nA: KRA will treat those expenses as profit and add them back to your taxable income. You will pay tax on money you already spent. The penalty for issuing non-eTIMS invoices is twice the amount of tax due.<\/p>\nQ: Can I issue an eTIMS invoice using my phone?<\/strong>
\nA: Yes. Non-VAT registered businesses can use eTIMS Lite via the mobile app (eTIMS Non VAT) or USSD *222#. VAT-registered businesses can access the eTIMS portal through a mobile browser.<\/p>\nQ: What is reverse invoicing in eTIMS?<\/strong>
\nA: Reverse invoicing allows a registered buyer to generate a tax invoice on behalf of a seller for goods or services received. It was introduced through the Tax Procedures (Amendment) Act, 2024, and is accessible via eCitizen.<\/p>\nQ: How do I register items on eTIMS?<\/strong>
\nA: Log in to the eTIMS portal, search for item classification using the UNSPSC code, enter your product or service name, find the relevant code, and click Register. You can register multiple items by repeating the process.<\/p>\nQ: What is the deadline for eTIMS compliance?<\/strong>
\nA: eTIMS has been mandatory since 1 September 2023 for all persons carrying on business. From the 2026 Year of Income, all declared income and expenses must be supported by valid electronic tax invoices.<\/p>\nQ: How do I verify if an eTIMS invoice is valid?<\/strong>
\nA: Scan the QR code on the invoice using any QR scanner. The code redirects to a KRA verification page that confirms the invoice status. You can also check the invoice status on the eTIMS portal.<\/p>\nQ: Can I issue a credit note on eTIMS?<\/strong>
\nA: Yes. Select the relevant invoice number under processed transactions, indicate whether it is a partial or full credit note, provide a reason, and save. Credit notes can only be generated from the solution where the original invoice was raised.<\/p>\nQ: What expenses are exempt from eTIMS?<\/strong>
\nA: Exempt expenses include emoluments (salaries and wages), imports, interest, investment allowances, airline passenger ticketing, payments subject to final withholding tax, and fees charged by financial institutions.<\/p>\nQ: How do I access eTIMS offline?<\/strong>
\nA: KRA has provided a USSD code *222# for taxpayers without regular internet access. The menu includes options for filing support and guidance on eTIMS compliance.<\/p>\nQ: What is the cost of eTIMS?<\/strong>
\nA: All KRA-provided eTIMS solutions are free. Third-party integrators may charge for setup and support.<\/p>\n |