Tax Invoice Management System (TIMS) was introduced in 2022 as a way to enhance the ETR regime which came into force in 2005. TIMS was established to ensure all business are issuing valid tax invoices. All VAT registered tax payers were obliged to onboard onto the TIMS system, which is integrated with the iTax platform. 

In 2023, the Kenya Revenue Authority (KRA) introduced a software solution called Electronic Tax Invoice Management System (eTIMS). eTIMS is a web based solution aimed to ensure overall tax compliance. 

Whilst TIMS required the taxpayer to purchase a new machine to ensure overall compliance, eTIMS is a software that would need to be installed on the taxpayers computers and mobile phones or may be accessed online thus making it more convenient and flexible for businesses to use. 

Who is required to comply with TIMS and eTIMS?

Prior to 2024, only VAT registered taxpayers were required to be TIMS compliant. However, with the amendment, both VAT registered and unregistered persons will need to be eTIMS compliant from 1st January 2024. 

Where a taxpayer is TIMS compliant, there is no requirement to register for eTIMS but they are required to ensure that all their sales are TIMS/eTIMS compliant. The recent communication is specific to taxpayers who are not TIMS/eTIMS compliant. 

TIMS/eTIMS compliance is necessary for all persons that are trading and includes individuals of companies who:

  1. earn residential rental income;

  2. are registered for Turnover Tax (“TOT”) and were not previously on boarded on the TIMS platform due to not meeting the KSh 5 million threshold;

  3. have an annual turnover of less than KShs 5 million per annum;

  4. trade in goods or services that are classified as exempt or zero rated under the VAT Act, 2013; or

  5. were VAT registered, however, faced challenges integrating the TIMS devices.

Are there any exemptions for TIMS and eTIMS?

Section 23A(4) of the Tax Procedures Act, 2015 provides that the following transactions are excluded from the implementation of eTIMS and TIMS;

  1. Emoluments received or paid that are subject to PAYE under the Income Tax Act;

  2. Importation of goods under the East African Community Customs Management Act, 2004;

  3. Importation of services from a foreign country;

  4. Interest income from financial institutions as defined by the Income Tax Act;

  5. Investment allowance as provided under the Second Schedule of the Income Tax Act;

  6. Airline passenger ticketing; and

  7. Any exemption granted by the Commissioner in accordance with the law.

eTIMS software solutions

The TIMS platform required taxpayers to purchase a hardware device in order to issue compliant invoices. 

eTIMS, on the other hand, is a software solution. The following eTIMS solutions are currently available for taxpayers:

  1. eTIMS single Paypoint (Windows) – This is suitable for taxpayers who are selling goods at a single location with a single cashier till. The software also contains a stock management module. The software will run on a computer/laptop with Windows 10 and above and can only be used by taxpayers selling goods.

  2. eTIMS Multi-Paypoint (Windows) – This is suitable for taxpayers selling goods and having multiple locations and paypoints/tills. The software also contains a stock management module. The software will run on a computer/laptop with Windows 10 and above and can only be used by taxpayers selling goods.

  3. eTIMS mobile app (Android) – This is an android app for taxpayers with an annual turnover not exceeding KShs 5 million per annum and are in the services sector only. This is suitable for taxpayers on the move and small and micro enterprises. It runs on Android 8 and above.

  4. eTIMS online portal – This is suitable for taxpayers in service sector (and do not sell goods) with not more than 10 invoices per month. It can be accessed on a browser.

  5. System to system integration – This provides for a system integration between the taxpayer’s billing system and the KRA eTIMS platform. KRA has provided a list of approved integrators who may assist you (at a fee) to integrate your system to eTIMS. Further, KRA has provided a sandbox for taxpayers to test the online sales control unit (OSCU) or virtual sales control unit (VSCU) prior to live operation of the integration.

Why you need to generate all your invoices through TIMS/eTIMS

Where a taxpayer fails to issue an Electronic Tax Invoice via eTIMS of TIMS and fails to comply with the tax law, the Commissioner shall issue a notice in writing requesting the reasons for non–compliance. Where the reasons provided by the taxpayer do not satisfy the Commissioner, the taxpayer shall be liable to a penalty of two times the tax due.


Why you need to ensure that all your purchase invoices are TIMS/eTIMS compliant

The Finance Act, 2023 amended Section 16 of the Income Tax Act to prohibit businesses from claiming all expenditure not supported by a TIMS/eTIMS generated invoice except where the transactions have been exempted as detailed above.

This means that businesses receiving invoices from suppliers that are not generated via the TIMS or eTIMS platform will have to disallow such expenses in their income tax returns thereby increasing their taxable income.

Therefore, businesses need to review their list of suppliers to ensure that they are all TIMS/eTIMS compliant. Further, it is important for businesses to check for TIMS/eTIMS compliance when onboarding new suppliers.

TIMS/eTIMS downtimes planning

A business may experience challenges with transmitting information to KRA through the TIMS/eTIMS system for a number of reasons including internal system downtimes or device theft.

 Whereas it is not mandatory, it is important for businesses to develop a plan on how to handle malfunctions or system downtimes when generating invoices and ensure that their staff are well trained on this plan. This plan may include how to:

  1. communicate the malfunction to KRA in writing at the earliest possible instance;

  2. arrange for the appropriate corrective measures;

  3. maintain a log of all transactions carried out during the downtime; and

  4. upload the transactions carried out during the downtime onto eTIMS upon resolution of the system challenge.


All businesses are required to be TIMS/eTIMS compliant by 1st January 2024.

However, on 27th December 2023, KRA issued a public notice extending the window for compliance to 31st March 2024. During this extended window, taxpayers will not incur penalties for manually generated invoices. However, they will be required to use this window to progressively input on TIMS/eTIMS all the non-compliant invoices. This will enable them comply with the Finance Act, 2023 and enable their clients to claim these expenses.

If you have any queries, please reach out to our Tax Director Jilna Shah ([email protected]) or your usual contact at RSM.


This newsletter has been prepared by RSM (Eastern Africa) Consulting Ltd, and the views are those of the firm, independent of its directors, employees and associates. This newsletter is for general guidance, and does not constitute professional advice. Accordingly, RSM (Eastern Africa) Consulting Ltd, its directors, employees, associates and its agents accept no liability for the consequences of anyone acting, or refraining from acting, in reliance on the information contained herein or for any decision based on it. No part of the newsletter may be reproduced or published without prior written consent. RSM (Eastern Africa) Consulting Ltd is a member firm of RSM, a worldwide network of accounting and consulting firms. RSM does not offer professional services in its own name and each member firm of RSM is a legally separate and independent national firm.