If you run a shop, restaurant, or duka in Kenya and you have been ignoring eTIMS, June 30, 2026 is your hard deadline.
Not a soft reminder. Not a "we recommend you start thinking about it." A hard, KRA-issued deadline after which expenses without valid electronic tax invoices will not be recognized for deductions.
This guide covers everything: what eTIMS is, who must comply, what the penalties look like, how to register, and how Kenyan businesses are automating the whole thing so it stops being a monthly headache.
What is eTIMS? (And Why KRA Built It)
eTIMS stands for Electronic Tax Invoice Management System. It is KRA's digital platform for issuing, managing, and transmitting tax invoices in real time directly to the tax authority. Every time your business makes a sale, the invoice data goes to KRA automatically.
The older system, TIMS (Tax Invoice Management System), launched in 2021 and relied on physical Electronic Tax Register (ETR) devices. eTIMS replaced that model. It runs on smartphones, computers, tablets, and integrates with invoicing and POS software via API. No bulky hardware required.
The motivation behind eTIMS goes back to 2016, when KRA discovered a widespread pattern of businesses claiming input VAT without genuine purchase documents. Fraudulent schemes involving so-called "missing traders" were costing the government billions. TIMS was the first response. eTIMS is the full solution: a system where every invoice is validated and transmitted before it counts for anything.
The goal from KRA's side is straightforward: digitize compliance so data flows directly from businesses into KRA systems without manual submission, curb tax evasion, and reduce leakage in the VAT system.
Who Must Comply with eTIMS in Kenya?
This is where a lot of business owners get confused, so let us be direct.
Effective September 1, 2023, all persons carrying on business in Kenya are required to electronically generate and transmit invoices via eTIMS. This is not limited to VAT-registered businesses. It covers:
VAT-registered businesses
Non-VAT-registered traders
Freelancers and consultants
Restaurants and food businesses
Retail shops and dukas
Professional service providers (lawyers, accountants, designers)
Companies, partnerships, and sole proprietors
Individuals with income other than employment income
The old exceptions for smaller traders have largely been removed or tightened as of 2025. If you issue invoices and those invoices matter for tax deductions or VAT credits, you must be on eTIMS.
KRA reinforced this further in October 2025 when it tied Tax Compliance Certificate (TCC) applications to eTIMS registration. A TCC is required for government tenders, contracts, and many formal business relationships. No eTIMS registration, no TCC. It is now a prerequisite for being recognized as tax compliant at all.
The 2026 Deadline: What Changes After June 30
Here is what KRA has confirmed for the 2026 year of income:
From the 2026 Year of Income onwards, all declared income and expenses must be supported by valid electronic tax invoices generated and transmitted through eTIMS or TIMS. No exceptions. No transitional arrangements.
For the 2025 year of income (returns due June 30, 2026), KRA offered temporary relief, allowing businesses to declare valid expenses not yet supported by eTIMS invoices. Those uploaded expenses are subject to KRA validation. This grace period does not carry forward.
What this means practically: any supplier who gives you a paper receipt or a PDF invoice not generated through eTIMS, that expense may be disallowed. Any sale you make that is not transmitted through eTIMS, that income record is incomplete in KRA's system.
The businesses that have been waiting to "sort it out later" have run out of later.
eTIMS Penalties: What Non-Compliance Actually Costs You
Let us talk numbers, because this is where it gets serious.
Penalties for eTIMS non-compliance in Kenya include:
Denied expense deductions. Any business expense not backed by a valid eTIMS invoice is not deductible. For a business spending KES 2 million a month on supplies, that is a significant tax exposure.
Financial penalties. Fines of up to KES 1 million or 10% of the tax involved, whichever is higher.
Tax assessments. KRA can issue estimated tax assessments based on industry averages when your records are incomplete. These estimates are rarely in your favor.
Business closure risk. KRA can issue compliance notices that lead to closure orders for persistent non-compliance.
TCC denial. As mentioned above, no eTIMS registration means no Tax Compliance Certificate, which effectively locks you out of government tenders and many formal contracts.
Late filing penalty. Failure to file income tax returns by June 30, 2026 carries an automatic penalty stipulated under Section 29 of the Tax Procedures Act, typically KES 2,000 for nil returns and higher for businesses with income.
The cost of compliance is always lower than the cost of non-compliance.
The Four Ways to Access eTIMS
KRA has built four channels for eTIMS access, designed for different business sizes and technical setups.
eTIMS Online (Web Portal). Accessed through the KRA portal at etims.kra.go.ke. Best suited for low-volume businesses that issue a small number of invoices monthly. You log in, generate invoices manually, and transmit them. It works but it is manual, which means it does not scale.
eTIMS Trader App. A mobile application for Android devices. Good for traders and small businesses that prefer doing things on their phone. You generate invoices directly from the app. Still manual but more portable than the web portal.
*eTIMS USSD via 222#. Designed for micro-enterprises without smartphones or reliable internet access. You generate invoices through USSD menus on any basic phone. The most accessible option but the most limited in features.
eTIMS API Integration. This is where the real efficiency lives. Businesses integrate eTIMS directly into their POS system or invoicing software via API. Every sale automatically generates and transmits an eTIMS-compliant invoice in real time, without any manual steps. This is the option chosen by restaurants and retail businesses with significant transaction volumes.
For any business doing more than a handful of transactions per day, the API integration route is the only one that makes operational sense. The manual channels work for monthly invoicing. They do not work for a restaurant doing 200 covers a day or a shop processing hundreds of transactions.
We wrote more about how eTIMS API integration works in practice here: The Veira eTIMS Integration Explained
How to Register for eTIMS: Step by Step
Registration happens through the iTax platform. Here is the process:
Step 1: Log into iTax. Go to itax.kra.go.ke and sign in with your PIN and password. If you do not have an iTax account, you will need to create one using your KRA PIN.
Step 2: Navigate to eTIMS registration. Under the "e-Invoice" or "eTIMS" section in your iTax dashboard, select the option to register for eTIMS.
Step 3: Choose your eTIMS solution. Select the channel that fits your business: Online, Trader App, USSD, or API integration. If you are using a POS system that already integrates eTIMS (like Veira), select the API option and your software handles the rest.
Step 4: Complete your business details. Fill in your business name, nature of business, and contact information. Ensure these match your KRA PIN registration.
Step 5: Await activation. KRA activates your eTIMS access. For API integrations, your software provider handles the technical handshake with KRA on your behalf.
Step 6: Start issuing eTIMS invoices. Every sale from this point forward must generate an eTIMS-compliant invoice. Your system will assign a unique eTIMS number to each transaction.
The mandatory fields on every eTIMS invoice include: seller PIN, buyer PIN (where applicable), invoice number, date and time of transaction, item description, quantity, unit price, VAT amount, and total amount. If you are using integrated software, these fields are populated automatically.
For a quick breakdown of what the registration looks like for a Nairobi shop owner, see this note: eTIMS Registration for Small Businesses
eTIMS and VAT: The Auto-Populated Return
One of the most significant changes KRA introduced alongside eTIMS is the auto-populated VAT return. The system now pre-fills parts of your VAT return using data already captured through eTIMS. This reduces manual work and lowers the risk of errors during filing.
There is one important nuance: if your business sells both taxable and tax-exempt goods or services, the system will not automatically calculate how your input tax should be split between the two. You will need to handle that apportionment yourself, either by adjusting individual invoice claims or using the apportionment fields in the return form.
For businesses selling only taxable goods, the auto-population significantly simplifies VAT filing. For mixed-supply businesses, it reduces but does not eliminate manual work.
eTIMS for Restaurants: What You Actually Need to Know
Restaurants are among the most affected businesses, and for a good reason. High transaction volumes, split bill scenarios, table service, takeaway, delivery, corporate invoicing and a mix of M-Pesa, card, and cash payments create a complex invoicing environment.
Here is what eTIMS compliance looks like in a restaurant context:
Every cover generates an invoice. Whether a customer pays KES 450 for lunch or a corporate client settles a KES 80,000 event invoice, both need to be eTIMS-compliant.
The invoice must be issued at the point of sale, not reconstructed at end of day. This rules out manual approaches for any restaurant doing meaningful volume.
M-Pesa payments need to be reconciled against eTIMS invoices. If a customer pays via M-Pesa Pochi la Biashara or Till Number, the payment confirmation and the eTIMS invoice need to reference the same transaction.
Split bills require each invoice to be individually compliant. If four people split a KES 12,000 table bill, each of the four invoices needs its own eTIMS transmission.
For restaurants trying to manage this manually, it is operationally unsustainable. The businesses getting this right are the ones using POS systems with built-in eTIMS integration.
See how Nairobi restaurants are handling eTIMS compliance at scale: How Restaurants Are Automating eTIMS
eTIMS for Shops and Dukas: The Practical Reality
For retail shops and dukas, the challenge is different. Transaction volumes are high, margins are thin, and most owners are running the business themselves without dedicated finance staff.
The compliance requirement is the same: every sale needs an eTIMS-compliant invoice. For a duka selling 300 items a day, that is 300 electronic transmissions.
The practical question is not whether to comply but how to make compliance invisible. The businesses doing this well are using POS systems where eTIMS is just part of how the sale is rung up. The shopkeeper scans or taps, the customer pays via M-Pesa, and the eTIMS invoice is generated and transmitted automatically. Nothing extra to do.
The businesses struggling are the ones trying to retrofit compliance onto manual processes: running a till and then separately logging into the KRA portal to generate invoices. That workflow breaks down fast.
The duka owner in Kasarani who switched to an integrated system said it well: "I did not change how I run my shop. I just got a system that handles the KRA side automatically."
What to Look for in an eTIMS-Compliant POS System
If you are evaluating POS systems for your Kenyan business, here is what eTIMS compliance actually looks like under the hood and what to verify before you commit.
Direct KRA API integration, not workarounds. Some systems generate invoices that you then have to manually upload to the KRA portal. That is not integration, that is extra work. Look for systems with a live, certified connection to the eTIMS API.
Real-time transmission. Invoices need to be transmitted at the point of sale, not batched at end of day. Batch transmission creates gaps and can cause compliance issues if the batch upload fails.
M-Pesa integration. In Kenya, most small business transactions go through M-Pesa. Your POS should accept M-Pesa Pochi la Biashara or Till Number payments and automatically match them to eTIMS invoices.
Automatic invoice numbering. Each eTIMS invoice gets a unique KRA-assigned control unit invoice number (CUIN). Your system should handle this automatically.
Offline capability. Internet connectivity in Kenya is not always reliable. Your POS should queue transactions when offline and transmit them when connectivity resumes, without losing data.
Inventory management. Not a compliance requirement but practically essential. A system that links your sales to stock levels means you know what you are selling, what is running low, and what your margins look like, all from the same place where eTIMS is handled.
VAT return pre-population support. Your system should organize sales data in a way that feeds cleanly into the auto-populated VAT return, reducing your monthly filing time.
Veira: Built for Kenyan Businesses, eTIMS Included
Veira is a POS platform built specifically for Kenyan restaurants, shops, and dukas. It runs on iOS, Android, and a free handheld terminal.
Every sale through Veira automatically generates and transmits an eTIMS-compliant invoice to KRA in real time. There is no separate step, no portal login, no end-of-day batch upload. You sell, the system handles compliance.
Veira also handles:
M-Pesa Pochi la Biashara and card payments in one place
Real-time inventory tracking
Sales reporting by item, category, staff, or time period
Working capital access for qualifying businesses
Multi-location management for businesses with more than one branch
The terminal is free. Setup takes less than a day. The support team is reachable on WhatsApp in minutes.
If you have been putting off eTIMS compliance because it sounded complicated, Veira makes it something you never have to think about again.
Get started at veira or WhatsApp us now to get set up before the June 30 deadline
Common eTIMS Questions from Kenyan Business Owners
Do I need eTIMS if I am not VAT registered?
Yes. Since September 2023, eTIMS compliance applies to all businesses in Kenya, not just VAT-registered ones. If you issue invoices that matter for anyone's tax deductions, those invoices must come through eTIMS.
What happens if my internet goes down during a sale?
A properly built eTIMS-integrated system queues the transaction and transmits when connectivity is restored. You do not lose the sale or the compliance record. This is one reason why offline capability matters when choosing a POS.
Can I still use a paper receipt?
You can give a customer a printed receipt, but the underlying invoice must have been generated and transmitted through eTIMS first. The printed receipt should show the eTIMS control unit invoice number.
Does eTIMS apply to M-Pesa transactions?
Yes. The payment method does not affect the eTIMS requirement. Whether a customer pays cash, M-Pesa, or card, the sale requires an eTIMS-compliant invoice.
What if my supplier does not use eTIMS?
This is one of the most pressing issues for businesses buying from informal suppliers. From the 2026 year of income, expenses without eTIMS backing risk being disallowed. This is creating pressure across supply chains for everyone to comply. If your key suppliers are not on eTIMS, now is the time to have that conversation with them.
How do I know if my POS system is properly eTIMS integrated?
Ask the vendor directly: is your system certified by KRA for eTIMS API integration? Does it transmit invoices in real time or in batches? Can you show me the eTIMS control unit invoice number on a sample receipt? If they cannot answer clearly, that is your answer.
Is eTIMS the same as TIMS?
No. TIMS (Tax Invoice Management System) was the earlier system that relied on physical ETR hardware devices. eTIMS is the software-based successor that runs on standard devices and integrates via API. Some older VAT-registered businesses may still be on TIMS. KRA has been migrating businesses to eTIMS. If you have a physical ETR device, check with KRA or your POS provider whether you need to migrate.
The Bigger Picture: Why eTIMS Matters Beyond Compliance
There is a version of this where eTIMS is just a compliance burden, another thing KRA is making you do. But there is a better way to look at it.
Every eTIMS-compliant business is building a verifiable financial record. That record is what banks and lending institutions look at when you apply for a business loan. It is what matters when you want to win a government tender. It is the foundation of formal business credit in Kenya.
SMEs account for over 30% of Kenya's GDP. The reason so many of those businesses struggle to access formal financing is that they cannot prove their revenue and expenses in a way that formal institutions trust. eTIMS compliance, done properly, starts to close that gap.
The business owner who has two years of clean eTIMS records is a fundamentally more financeable business than one who has none. That is not an abstract benefit. That is access to working capital at formal interest rates instead of informal ones.
Kenya's tax base expanding through eTIMS also means more predictable government revenue, which has downstream effects on infrastructure investment and business environment. The short-term compliance cost is real. So is the long-term structural benefit.
What to Do Before June 30, 2026
If you are reading this before the deadline, here is your action list:
Check your KRA iTax account and confirm whether you are registered for eTIMS. If not, start the registration process today.
Audit your current invoicing process. How are you issuing invoices? Who is generating them? How long does it take?
Evaluate your POS or invoicing software. Is it eTIMS-integrated? Does it transmit in real time? If you are not sure, ask your provider directly.
Talk to your key suppliers. If you are buying goods and services from businesses not on eTIMS, those expenses are at risk. Encourage your suppliers to get compliant.
File your 2025 income tax return by June 30, 2026. Even if your eTIMS setup is not perfect yet, file the return. The late filing penalty applies regardless of your eTIMS status.
Switch to an integrated POS if you are still managing compliance manually. The operational burden of manual eTIMS submission does not shrink over time. It grows with your business.
The businesses that get eTIMS right are not just staying out of trouble. They are building cleaner operations, better records, and a stronger foundation for growth. The deadline is real. The penalties are real. But so is the upside of getting this sorted properly.
Start with Veira or reach us directly on WhatsApp.
We will have you set up and transmitting compliant invoices before June 30.
