KRA published a public notice saying that from 1st January 2026, they will start validating all income and expenses declared on tax returns. This is for individuals and businesses. What does that actually mean?
In the past, you could walk into iTax, punch in whatever income and expenses you believed were correct, and file. KRA mostly relied on trust and occasional audits.
But now KRA is basically saying,
“We are matching your return with our own digital records. If it doesn’t match, we’re flagging it.”
They’ll be checking against:
- TIMS/eTIMS invoices
- Withholding tax records
- Import records from Customs
What Is eTIMS Explained Simply
Your business transactions have a digital footprint for every sale and every expense. That’s eTIMS, the Electronic Tax Invoice Management System.
When someone sells goods or services, the system issues a digital tax invoice containing:
- The seller’s PIN
- The buyer’s PIN
- The date
- The amount
- Taxes involved
And this invoice is sent directly to KRA in real time.
Question: If I buy goods and the supplier issues an eTIMS invoice with my PIN, KRA already knows I made that purchase?
Answer: Right. And when you go to claim that expense on your tax return, KRA will check:
“Did we receive an eTIMS invoice for this?”
If not… it may be disallowed.
Why Is KRA Doing This?
KRA is basically closing the loopholes.
If it’s not digital, verified, and transmitted, then it’s not recognized.
Kenya’s tax system has had its challenges for years.
People were:
- Declaring fake expenses
- Under-reporting income
- Buying goods without valid receipts
- And businesses were issuing manual invoices you could never trace
What This Means for You (Simple Action Points)
Three things:
- Only buy from suppliers who issue eTIMS invoices.
If they don’t? Your expense may be rejected. - Check your eTIMS schedule regularly.
Ask your accountant or tax agent to download your monthly or quarterly eTIMS statement. - Prepare for the 2025 tax return.
Because when you file it in 2026, KRA will validate every shilling.
If you are unable to manage your rental compliance on your own, it is always good to speak to an expert. Get in touch, and we will be able to help you.
Disclaimer: Any advice in this publication is limited to the conclusions specifically set forth herein and is based on the completeness and accuracy of the stated facts, assumptions and/or representations included. In rendering our advice, we may consider legal authorities that are subject to change, retroactively and/or prospectively, and any such changes could affect the validity of our advice. We will not update our advice for subsequent changes or modifications to the law and regulations, or to the judicial and administrative interpretations thereof.
