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eTIMS explained: KRA's electronic invoicing for small businesses

eTIMS is KRA's system for issuing electronic tax invoices. It is free, and it affects every business, VAT-registered or not. Here is what it is, the options and why your customers care.

By QoraDaily Team 2 min read

eTIMS (the electronic Tax Invoice Management System) is KRA's free system for issuing invoices that are sent to KRA as they are made. It runs on computers, tablets and phones.

Who must use eTIMS?

KRA requires persons in business to issue electronic tax invoices whether or not they are registered for VAT. That includes VAT-exempt suppliers such as hospitals, schools and tour operators.

Where a seller cannot issue an invoice, such as a small-scale farmer or informal trader, KRA lets a registered buyer issue the invoice on the seller's behalf through buyer-initiated invoicing. This option cannot be used for VAT-registered sellers.

Why your customers care

From 1 January 2024, a business can only claim an expense for tax if it is supported by an eTIMS invoice. Some costs are excluded from this rule, including salaries and wages, imports, interest and fees charged by financial institutions. In practice, business customers increasingly insist on eTIMS invoices from their suppliers.

Your options

  • USSD: dial *222# and choose KRA services to reach the buyer-initiated invoicing module.
  • eTIMS Lite (web and app): through eCitizen or the mobile app.
  • Online portal: a web-based invoicing platform at etims.kra.go.ke.
  • eTIMS Client: downloadable software for Windows and Android that supports several branches and tills.
  • System-to-system integration: connects an existing invoicing or point-of-sale system to eTIMS (VSCU and OSCU).
  • Reverse and buyer-initiated invoicing: the buyer creates the invoice for the seller.

All the solutions are free from KRA. Each one keeps its own invoice number sequence, and credit notes must be issued from the same solution as the original invoice.

Getting started

  1. Make sure your KRA PIN is active and your details on iTax are up to date.
  2. Pick the solution that fits: USSD or app for a small shop, eTIMS Client or integration for a business with several tills.
  3. Onboard through KRA's eTIMS portal, then issue your first invoice and check it appears on your taxpayer portal.

Sources

This article is general information, not financial advice.