The Kenya Revenue Authority (KRA) has announced a new validation process that will involve cross-referencing the income and expenses declared in individual and business income tax returns with several key electronic data sources.
These sources include TIMS and eTIMS invoices, records of withheld income tax, and import data from customs systems.
The new validation will take effect from January 1, 2026, and will apply as soon as taxpayers submit their returns for the 2025 year of income or accounting period through the iTax platform.
The change requires that all declared transactions be supported by a valid electronic tax invoice, which must be correctly transmitted with the buyer’s Personal Identification Number (PIN), where applicable, to ensure a clear digital trail for each transaction.
There are exceptions, such as emoluments (salaries and wages), fees charged by financial institutions, airline passenger ticketing, and expenses already subject to final withholding tax, as indicated in Section 23A of the Tax Procedures Act, Cap 469B and the Tax Procedures (Electronic Tax Invoice) Regulations, 2024.
KRA has made it clear that informal record-keeping is no longer acceptable, and proper digital record-keeping is mandatory.
To help taxpayers prepare, KRA is encouraging them to proactively request their TIMS or eTIMS schedules, which provide a summary of annual income and expenses, from their designated account managers. The authority has also invited feedback from taxpayers and stakeholders to ensure the smooth and effective implementation of the system.
