What Is eTIMS?
eTIMS stands for the Electronic Tax Invoice Management System. It is a KRA platform that requires every business in Kenya to issue, transmit, and store tax invoices electronically in real time. Unlike the old system where you could issue handwritten or typed invoices and submit them later, eTIMS sends each invoice to KRA's servers the moment you create it.
The system generates a unique QR code and an eTIMS server confirmation code for every invoice. This allows KRA, your customers, and any auditor to verify the invoice instantly by scanning the QR code. It also means KRA can see your sales in real time - there is no gap between when you make a sale and when KRA knows about it.
eTIMS is not optional. The Finance Act 2023 amended the Tax Procedures Act to make eTIMS mandatory for all persons engaged in business. Enforcement began in earnest from January 2026, and KRA has been conducting nationwide compliance checks. Businesses that have not onboarded face escalating penalties.
Why KRA introduced eTIMS
Kenya has a large informal sector and historically low VAT compliance. By capturing invoice data in real time, KRA can track sales across the supply chain, detect under-reporting, and close the VAT gap. eTIMS also reduces the administrative burden on compliant businesses by replacing paper-based record-keeping with an automated digital trail.
Legal Basis: Finance Act 2023
The legal foundation for eTIMS is Section 23A of the Tax Procedures Act (TPA), which was introduced by the Finance Act 2023. This section empowers KRA to prescribe the manner in which tax invoices must be issued, transmitted, and stored electronically.
The key provisions state that every person engaged in business must use KRA-approved electronic systems to issue tax invoices and transmit invoice data to KRA in real time. The Commissioner may prescribe different electronic systems for different classes of taxpayers, which is why KRA developed the multiple eTIMS solution types.
Additionally, Section 43 of the TPA grants KRA access to business premises and electronic records for inspection. KRA compliance officers have been using this power to conduct physical visits to business premises, verify eTIMS registration, and compare physical stock against eTIMS-reported sales.
Enforcement from January 2026
After a phased rollout starting in 2024 and a period of education and grace, KRA began full enforcement in January 2026. Compliance checks, desk audits, and field visits have intensified. If you have not yet onboarded, you are already accruing penalties.
Which Businesses Must Register for eTIMS?
The short answer: every person engaged in business. Unlike VAT registration, which is triggered by a KES 5 million turnover threshold, eTIMS applies to ALL businesses regardless of size or turnover. This includes:
- VAT-registered businesses - mandatory under any circumstances.
- Turnover tax (TOT) payers with turnover below KES 5 million.
- Rental income earners - including landlords with residential or commercial properties.
- Informal sector businesses - kiosks, market vendors, mechanics, salons, and boda boda operators if they supply goods or services.
- Professionals - lawyers, accountants, consultants, doctors, and architects issuing invoices for services.
- Wholesalers and distributors - especially those dealing with fast-moving consumer goods (FMCG).
- Importers and exporters - eTIMS Trader solution integrates with customs data.
Important: If you issue an invoice that is not transmitted through eTIMS, your customer cannot claim input VAT on that invoice. This means your B2B customers will insist on eTIMS invoices - otherwise they lose their VAT deduction. Market pressure alone is driving many businesses to register.
eTIMS Solution Types Explained
KRA offers five eTIMS solutions. The right one depends on your business type, transaction volume, and whether you have existing systems.
eTIMS Lite (Free - Web-Based)
Best for: Small businesses, sole traders, informal sector
eTIMS Lite is a free web application you access through any browser at etims.kra.go.ke. You log in, create invoices manually, and print or email them to your customers. Suitable for businesses issuing fewer than 50 invoices per month. No installation required. Ideal for non-VAT-registered businesses and turnover tax payers.
eTIMS Client (Desktop Application)
Best for: Medium-volume businesses
A downloadable Windows desktop application that stores your customer list and product catalogue locally. Supports offline invoice creation with automatic sync when you reconnect. Better suited for businesses issuing 50 to 500 invoices per month. Includes inventory management and basic sales reporting.
eTIMS Trader (Customs Integration)
Best for: Importers, wholesalers, and large distributors
Built for businesses that import goods and sell through the supply chain. eTIMS Trader integrates with the KRA customs system (iCMS), allowing invoices to reference import documents. Designed for high-volume wholesale operations where goods move with pre-generated eTIMS invoices from the point of clearance.
VSCU / OSCU (POS Integration)
Best for: Retailers, supermarkets, restaurants with existing POS or ERP
The Virtual Sales Control Unit (VSCU) and Online Sales Control Unit (OSCU) are API-based solutions. A software developer integrates the KRA eTIMS SDK into your existing Point-of-Sale or Enterprise Resource Planning system. Every transaction on your POS automatically generates an eTIMS-compliant invoice in the background. This is the most seamless option but requires technical integration.
Buyer Initiated Invoicing (BII)
Best for: Buyers who purchase from small suppliers not yet on eTIMS
Under this model, a VAT-registered buyer can generate and transmit an eTIMS invoice on behalf of a small supplier who is not yet on the system. This allows the buyer to still claim input VAT while giving the supplier time to onboard. The supplier gets a notification and must accept or reject the invoice. BII is a transitional solution - the supplier is expected to register for eTIMS within a reasonable period.
Not sure which one you need?
Most small businesses should start with eTIMS Lite because it is free and requires no installation. If you outgrow it, KRA allows you to upgrade to eTIMS Client or VSCU later. See our invoicing guide for mandatory invoice fields and QR code verification. Smart VAT Kenya can help you choose the right solution and complete the registration.
Get Help ChoosingStep-by-Step eTIMS Onboarding Process
The onboarding process has two parts: registering on iTax, and then setting up your actual eTIMS account at etims.kra.go.ke.
Log in to itax.kra.go.ke
Use your KRA PIN and password. If you do not have a KRA PIN, register for one first at the iTax portal under 'New PIN Registration'.
Portal not loading? See our iTax troubleshooting guide.
Navigate to the eTIMS menu
Under the 'Returns' tab, click 'eTIMS'. If you do not see this menu option, your browser may need to be updated, or you may need to enable pop-ups for the iTax domain.
Select your eTIMS solution type
Choose from eTIMS Lite, eTIMS Client, eTIMS Trader, or VSCU/OSCU. Read the descriptions carefully - selecting the wrong type may require a fresh application. If unsure, start with eTIMS Lite.
Complete the registration form
Fill in your business details including your registered business name, physical location, line of business, and estimated monthly invoice volume. For VSCU/OSCU, you must also provide your system integrator's details and the software vendor name.
Upload any required documents
For eTIMS Client and Trader, you may need to upload your KRA PIN certificate, business registration certificate, and a signed declaration. For VSCU/OSCU, include the system integrator agreement.
Submit and wait for KRA approval
KRA typically approves eTIMS applications within 1 to 3 working days. You will receive an email notification with your eTIMS login credentials and a link to access the system at etims.kra.go.ke.
Log in to etims.kra.go.ke and set up your account
Use the credentials sent to your email. On your first login, you must change your password and set up your security questions. Then configure your business profile, add your product or service catalogue, and create your customer list.
Issue your first eTIMS invoice
Create a test invoice to ensure the system is working. Enter the customer details, describe the goods or services, apply the correct tax rate, and generate the invoice. Confirm that the QR code and server confirmation code appear on the printed invoice. Verify the invoice by scanning the QR code with KRA's eTIMS verification app.
We Can Do This for You
Smart VAT Kenya handles eTIMS onboarding as part of our VAT registration package (KES 5,000 flat fee). If you already have a VAT PIN, we offer standalone eTIMS onboarding at a competitive rate. We identify the right solution, complete your iTax application, and walk you through your first invoice.
Start eTIMS OnboardingMandatory eTIMS Invoice Fields
Every eTIMS invoice must contain the following fields. If any of these are missing, KRA will treat the invoice as invalid and your customer (if B2B) will lose their input VAT claim.
Seller's registered business name and KRA PIN
Must match the name on your KRA PIN certificate exactly.
Buyer's KRA PIN (for B2B transactions above KES 10,000)
Required for all B2B sales exceeding KES 10,000. For B2C sales, record the buyer's name and ID number.
Sequential eTIMS invoice number
Generated automatically by the eTIMS system. Do not create your own numbering system.
Invoice date
The actual date of the transaction. Backdating or forward-dating invoices is an offence.
Full description of goods or services
Generic descriptions like 'miscellaneous' or 'services rendered' may be rejected by KRA on audit.
Quantity and unit price
Clearly state the quantity of each item and the unit price excluding VAT.
Tax rate and VAT amount
16% standard rate, 8% for supplies to unregistered persons (if applicable), or 1.5% for special cases. Show the VAT amount in both words and figures.
Total amount including VAT
The gross amount the customer must pay.
QR code
KRA's encrypted QR code containing the invoice metadata. Scannable via the eTIMS verification app.
eTIMS server confirmation code
A unique alphanumeric code generated by the KRA server confirming the invoice was transmitted successfully.
Pro tip: Always verify your eTIMS invoice by scanning the QR code using KRA's free verification app before sending it to your customer. A failing QR code means the invoice was not transmitted to KRA and is not valid for input VAT claims.
Penalties for eTIMS Non-Compliance
KRA has made it clear that eTIMS compliance is not optional. The penalties are designed to make non-compliance financially painful. Here is what you face if you do not onboard.
| Offence | Penalty |
|---|---|
| Non-compliant eTIMS invoice issued (incl. unregistered / outside-system sales) | Higher of 5% of tax due, KES 100,000 (companies) or KES 10,000 (individuals) (TPA s.86) |
| Failure to keep or issue required invoices | Higher of 5% of tax due, KES 100,000 (companies) or KES 10,000 (individuals) (TPA s.86) |
| System integration not completed after written notice | Up to KES 100,000 per month (TPA s.59A(5)) |
| Issuing invoices outside eTIMS | Input VAT blocked + audit adjustment |
| Non-compliance found on audit | 50% surcharge on additional assessment |
| Incorrect or incomplete invoice fields | KES 10,000 per invoice |
Cumulative effect
The penalties stack. If you have been operating without eTIMS for 6 months, you owe KES 300,000 just for the non-registration penalty, plus 50% surcharge on any audit adjustments, plus interest. Do not wait for KRA to find you - onboard now.
Input VAT claims blocked: Even if you are VAT-registered and file your returns on time, if your purchases are from suppliers who are not using eTIMS, you cannot claim input VAT on those purchases. This creates a cascading compliance pressure through the entire supply chain. See our VAT registration guide and our eTIMS penalty guide for details. Also note that eTIMS compliance is now a requirement for getting a KRA Tax Compliance Certificate (TCC).
KRA eTIMS Official Resources
KRA publishes detailed guides for each eTIMS solution. These are the official PDFs - we have summarised the key takeaways for each below. Click to expand and download the full guide.
eTIMS GUIDES & MANUALS
eTIMS Application Procedure - 8 pages
Complete walk-through of the eTIMS onboarding process from start to finish:
- Signing up on the eTIMS portal at
etims.kra.go.ke - Submitting your application with business details and KRA PIN
- KRA officer review and approval process
- Activating your account and setting up your profile
eTIMS Online Portal User Guide - 11 pages
Detailed guide for businesses using the eTIMS Online Portal (service-only suppliers):
- Logging in for the first time and resetting your password
- Classifying your inventory items by product type and tax rate
- Raising single and bulk invoices with the correct mandatory fields
- Printing invoices with QR codes and emailing them to customers
eTIMS Lite (VAT) User Guide - 29 pages
Comprehensive guide for small taxpayers using eTIMS Lite from a phone or browser:
- How eTIMS Lite differs from the full eTIMS Client application
- Issue invoices, credit notes, and receipts from any device
- Managing your product catalogue and customer list
- Generating sales reports for your own record-keeping
OSCU / VSCU Sign-Up Guide - 13 pages
For businesses integrating eTIMS with existing POS or ERP systems:
- Step-by-step sign-up for Online Sales Control Unit (OSCU) and Virtual Sales Control Unit (VSCU)
- API integration requirements and SDK documentation
- Testing and certification process before going live
- Penalties for operating without integration after notice: up to KES 100,000 per month (TPA s.59A(5))
eTIMS PayPoint Guides - Windows (34pp) + Android (30pp)
Full installation and usage manuals for the eTIMS PayPoint application:
- Installing eTIMS PayPoint on Windows POS terminals and Android phones
- Configuring taxes, printers, and receipt templates
- Daily sales reconciliation and Z-report generation
- Offline mode - invoices are queued and synced when connectivity returns
eTIMS Onboarding Guidelines - 4 pages
Quick-reference eligibility guide for every eTIMS solution type:
- eTIMS Lite: free web-based, for businesses with fewer than 50 invoices per month
- eTIMS Client: desktop application for medium-volume businesses
- eTIMS Online Portal: for service-only suppliers
- VSCU / OSCU: API integration for businesses with existing POS/ERP
Frequently Asked Questions
Do I need eTIMS if my business is not VAT-registered?
Yes. The Finance Act 2023 (Section 23A of the Tax Procedures Act) requires ALL persons engaged in business to use eTIMS - not only VAT-registered businesses. This includes turnover tax payers, rental income earners, informal sector businesses, and professionals. If you sell goods or services in Kenya, you must issue eTIMS-compliant invoices.
What is the difference between eTIMS Lite and eTIMS Client?
eTIMS Lite is a free web-based solution accessed through a browser - ideal for small businesses issuing fewer than 50 invoices per month. eTIMS Client is a downloadable desktop application for Windows with more features, suitable for medium-volume businesses that need offline capability, inventory management, and customer records. Both transmit invoices to KRA in real time.
What is the penalty for not registering for eTIMS in Kenya?
The eTIMS penalties with clear legal footing are: since the Finance Act 2026 (in force 1 July 2026), the higher of 5% of the tax due, KES 100,000 (companies), or KES 10,000 (individuals) for failing to issue compliant electronic tax invoices or to file/pay electronically (TPA s.86; previously two times the tax due); and up to KES 100,000 per month for failing to integrate a data-management system once notified (TPA s.59A(5), for taxpayers with turnover above KES 5 million). Additionally, input VAT claims are blocked for invoices not transmitted through eTIMS. Figures like KES 1,000,000 or 10% of the tax per invoice, KES 500,000 per month, or KES 50,000 per month circulate in some guidance but are not standalone statutory penalties under the enacted law.
How do I register for eTIMS on iTax?
Log in to itax.kra.go.ke, go to the eTIMS menu under Returns, select the eTIMS solution that fits your business (Lite, Client, Trader, or VSCU/OSCU), complete the registration form, and submit. KRA will approve your application and send login credentials to your registered email. You can then access the system at etims.kra.go.ke.
What information must appear on an eTIMS invoice?
Every eTIMS invoice must include: the seller's registered business name and KRA PIN, the buyer's KRA PIN (for B2B transactions above KES 10,000), a sequentially numbered eTIMS invoice number, the invoice date, a full description of goods or services, the quantity and unit price, the tax rate (16%, 8%, or 1.5%), the VAT amount in both words and figures, a unique QR code, and the eTIMS server confirmation code.
Can I integrate eTIMS with my existing POS system?
Yes. KRA provides the Virtual Sales Control Unit (VSCU) and Online Sales Control Unit (OSCU) API for businesses with existing POS or ERP systems. Your software developer integrates the KRA eTIMS SDK into your system so that every sale automatically generates an eTIMS-compliant invoice. If integration fails or you operate without it after the deadline, you face up to KES 100,000 per month under TPA s.59A(5) (for turnover above KES 5 million, on conviction) plus the TPA s.86 e-invoice penalties.
Does Smart VAT Kenya help with eTIMS onboarding?
Yes. Smart VAT Kenya includes eTIMS onboarding guidance as part of our KES 5,000 VAT registration package. We help you identify the correct eTIMS solution for your business, assist with the iTax registration, and walk you through issuing your first eTIMS invoice. For businesses that already have a VAT PIN but need eTIMS help, we offer standalone eTIMS onboarding support at a flat rate.