Overview
The Kenya Revenue Authority (KRA) is entering a new phase of tax administration anchored on real-time transaction data. From 1 January 2026, income tax returns will be subject to systematic validation against the KRA’s electronic datasets—including Electronic Tax Invoice Management System (eTIMS) invoice records, withholding tax returns, and customs import data. What began as a VAT-focused compliance tool has now evolved into a central control pillar of income tax enforcement. Taxpayers now risk having expenses unsupported by compliant electronic invoices administratively disallowed, subject to statutory exemptions and applicable objection and appeal mechanisms. This development marks a structural shift from periodic, summary-based reporting to continuous transactionlevel scrutiny, fundamentally changing how taxpayers must manage tax compliance risk.
Our commentary
The move to eTIMS-based income and expense validation represents a fundamental shift in Kenya’s tax compliance landscape. By anchoring tax outcomes to electronic transaction data, KRA is transitioning towards continuous, automated enforcement, with reduced tolerance for post filing explanations. For taxpayers, risk is no longer confined to computational errors, but now extends to process discipline, data integrity, supplier behaviour and system design. Taxpayers that align early will not only reduce exposure but also gain greater certainty and audit readiness.
Key contact
Sandeep Main
Partner, Tax & Regulatory Services and Africa Head of Private Enterprise
KPMG One Africa
