The Kenya Revenue Authority is introducing a new tax compliance certificate that links full adoption of the Electronic Tax Invoice Management System to eligibility for official certifications.
The measure is aimed at encouraging businesses to fully embrace digital invoicing to improve tax reporting and transparency.
Unlike the standard tax compliance certificate, which focuses mainly on filing returns and paying taxes, the Merchant Tax Compliance Certificate will confirm that a business’s transactions are properly recorded and supported by electronic invoices through eTIMS.
This is expected to push companies to ensure all expenses and sales are accurately documented.
The certificate will be needed in a variety of situations. Businesses will require it to participate in government tenders, clear goods through customs, or obtain and renew licences, including liquor and clearing agent permits. Individuals applying for government positions, as well as foreign nationals seeking work permits or renewals, will also need the certificate.
KRA Commissioner General Humphrey Wattanga emphasized that the new certificate will create fairness in the business environment by making sure all commercial transactions are electronically verified.
“A level playing field can only be achieved when all businesses comply with tax obligations and statutory levies,” he said at the 2026 AmCham Outlook Forum. “It is for this reason that KRA is rolling out initiatives such as the Merchant Tax Compliance Certificate to promote consistent and strong compliance across the business community,” Wattanga added.
He also said the authority is taking steps to make sure individuals earning above Sh24,000 per month pay the correct amount of tax. “This has informed the introduction of income and expense validation, for both individual and non-individual income tax returns, using data from eTIMS, withholding tax records and import information from customs systems,” he noted.
eTIMS requires businesses to issue electronic invoices for all taxable supplies, enabling KRA to track sales and VAT compliance in real time. Since January 1, the authority has been automatically cross-checking declared income and expenses with live eTIMS data, withholding tax records, and customs import figures.
The audits have exposed large-scale tax gaps. KRA investigators have identified 392,162 businesses and high-income individuals who owe Sh759.7 billion. These findings have paved the way for enforcement measures, including travel restrictions, asset freezes, and deactivation of personal identification numbers.
The discrepancies came to light after reviewing the withholding tax registry, which revealed that some taxpayers declared far less income than third parties reported paying them. In several cases, individuals and companies filed nil returns despite receiving payments from other firms.
The revenue authority also reported that domestic VAT collections have risen to between Sh28 billion and Sh30 billion per month, up from Sh20 billion, thanks to the requirement that all sales must be supported by eTIMS-generated invoices.
