Learn About eTIMS

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What is eTIMS?

Simplicity, Convenience and Flexibility

 

eTIMS (electronic Tax Invoice Management System) is a software solution that provides taxpayers with options for a simple, convenient and flexible approach to electronic invoicing.

Taxpayers can access eTIMS on various computing devices, including computers, laptops, tablets, smartphones, and Personal Digital Assistants (PDAs).

 

Who Should Use eTIMS?

All persons engaged in business are required to on-board eTIMS and issue electronic tax invoices. However, where the supply is received from a small business enterprise (whose annual turnover does not exceed five million shillings), the purchaser shall issue a tax invoice on their behalf.

Persons in business include:

  • Companies, partnerships, sole proprietorships, associations, trusts etc. 
  • Persons with income tax obligations including - 
  • Monthly Rental Income (MRI) Tax
  • Turnover Over Tax (TOT)
  • Annual Income Tax – for Corporations, Partnerships and Individuals, both resident and non-residents with a permanent establishment. 
  • Persons conducting business in various sectors, including the informal sector.
  • Persons in business whether or not registered for VAT. Persons in business but not required to register for VAT e.g. persons supplying VAT exempt   goods and services such as hospitals supplying medical services, schools supplying education services, tours and travel agents, NGO’s in business etc   are also required to on-board on eTIMS.

 

Why is it not just for VAT registered taxpayers?

The law requires that for any person to claim their business expense, the expense must be supported by an electronic tax invoice as at 1st January 2024. Therefore, ALL persons engaged in business are required to issue electronic tax invoices.

Where the seller is a small business or a small-scale farmer, (whose annual turnover does not exceed five million shillings), the purchaser shall issue a tax invoice on behalf of the seller for purposes of claiming that purchase as a business expense. KRA has availed the Buyer Initiated Invoicing Solution to facilitate this process. This solution is accessible on the eCitizen platform

 

Why eTIMS?

  1. It aids in reducing compliance costs as the solutions are provided free of charge;

  2. eTIMS offers flexibility in the solutions available and is accessible on various computing devices;

  3. The stock management module assists taxpayers maintain their own inventory;

  4. eTIMS allows taxpayers to a maintain record of invoices issued on the taxpayer portal;

  5. eTIMS facilitates simplified return filing for taxpayers.

 

What costs are excluded from eTIMS?

The following valid business costs have been excluded from the requirement of being supported by an eTIMS invoice:

  1. emoluments (salaries & wages)
  2. imports
  3. air passenger ticketing
  4. investment allowances
  5. interest
  6. fees charged by financial institutions
  7. expenses subject to withholding tax that is a final tax
  8. services provided by a non-resident person without a permanent establishment in Kenya

 

FAQs?

Frequently asked questions on eTIMS can be accessed from here:

 

FAQs on eTIMS