The Kenya Revenue Authority (KRA) says compliance with e-invoicing and the Electronic Tax System (ETS) has reached about 80 percent, a significant improvement since its rollout.
Speaking in an interview on NTV on Wednesday, Maurice Oray, KRA’s Deputy Commissioner for Policy and Tax Advisory, said the Finance Act 2025 has made it easier for small-scale traders earning under Sh5 million to comply, while ensuring larger transactions remain transparent.
Oray noted that the requirement for all transactions and invoices has been in place since 2023, and the Authority has been keen to remove surprises for taxpayers.
“As you are aware, the law requires that all transactions, all invoices, must be generated, and it has been there since 2023. When we issue public notices, we want people to know what is expected,” he said.
The system also allows KRA to track withheld taxes and customs imports more effectively. “If your tax has been withheld, it means you carried out a transaction, and that transaction counts as income. We will verify such cases, so people claiming withholding tax are aware that we have records of the transactions,” Oray added.
He admitted that adoption was initially slow, citing lack of preparation and system challenges. “We gave taxpayers six months to comply by January 2024. The law has since been refined to help small-scale traders under Sh5 million, and we have seen a significant rise in uptake,” he said.
Oray also explained provisions such as reverse invoicing, which allows a buyer to generate an invoice on behalf of a small trader who cannot.
“The main aim of e-teams is to create visibility. Even if a small trader cannot issue an invoice, the buyer can do it on their behalf,” he said.
Small traders under the turnover tax (ToT) regime, which charges 3 percent of transaction value, are not required to keep detailed records, he noted, meaning the system does not add extra burdens.
Oray said the reforms are designed to make Kenya’s tax system more transparent, accountable, and easier to comply with. “Ultimately, these measures ensure fairness and efficiency across all levels of trade,” he said.
The Kenya Revenue Authority had implemented the electronic Tax Invoice Management System (eTIMS) for e-invoicing. This system requires both VAT and non-VAT registered taxpayers to issue valid electronic tax invoices for their business expenditures to be tax deductible. KRA recently enhanced the eTIMS system to improve user experience.
KRA is a government agency established in 1995 to assess, collect, and account for all tax revenues due to the government, in accordance with Kenyan law. Its mandate includes administering various taxes, facilitating trade, and enforcing compliance to fund essential public services
