By Caine Wanjau – CEO Digitax
NAIROBI, Kenya, Dec 8 – The migration from the Tax Invoice Management System (TIMS) to the Electronic Tax Invoice Management System (eTIMS) is a strategic shift to how the government and taxpayers manage compliance, efficiency, and business continuity. However, several taxpayers remain tethered to traditional TIMS devices, weighed down by slow processing and fragmented invoicing. As compliance requirements increase and the paradigm shift towards eTIMS engages high gear, there is need for taxpayers to consider upgrading to eTIMS.
The digitization of Value Added Tax (VAT) regime started in 2004 with the introduction of Electronic Tax Registers (ETRs). These devices assisted to generate real-time transaction records that were transmitted to the Kenya Revenue Authority (KRA) and produced VAT compliant invoices.
Subsequently, the VAT (Electronic Tax Invoice) Regulations, 2020, introduced the Tax Invoicing Management Systems (TIMS), a real-time invoice transmission and centralized monitoring through hardware-based integration with KRA systems. Depending on the business model, taxpayers had an option to choose from various hardware solutions that were purchased and maintained by approved third-party suppliers. These devices helped businesses authenticate and transmit invoices in real time, curbing revenue leakages and improving accountability.
The initial costs of purchasing these TIMS devices were a barrier to entry and compliance with some TIMS hardware providers also requiring set-up costs and, in some instances, annual renewal fees. The requirement to purchase and maintain these devices is expensive and inefficient, especially for companies with multiple branches or high transaction volumes. Integration with enterprise resource planning (ERP) or point-of-sale (POS) systems is also very cumbersome and expensive. Lastly, there have been many reports of connectivity interruptions and delayed real-time transmission.
These inefficiencies create significant business risks, particularly high non-compliance costs of penalties and disallowed expenses for income tax purposes. This was emphasized by the KRA’s notice dated 7 November 2025 which indicated that effective 1 January 2026, KRA will begin validating income and expenses declared in the returns to ensure compliance with eTIMS.
The introduction of eTIMS was a significant improvement from the TIMS solution. Unlike TIMS, eTIMS is software-driven, cloud-enabled, and designed to integrate seamlessly with modern software. It allows compliant invoicing directly from computers, smartphones, tablets, or ERP platforms without reliance on physical devices. This makes it far more efficient and adaptable to various business models.
It supports real-time synchronization with KRA systems, reducing transmission delays and improving accuracy. Businesses can centralize data from multiple branches, gaining enhanced visibility into sales trends, expenses, and tax positions. Moreover, by eliminating hardware dependencies, eTIMS lowers long-term maintenance costs and operational disruptions.
The system also enhances record-keeping integrity, allowing finance teams to manage audit trails and compliance documentation more efficiently.
While eTIMS provides the technological framework, the transition from TIMS to eTIMS requires expertise and careful execution. This is where third-party integrators like DigiTax have established themselves as trusted partners.
DigiTax delivers tailored eTIMS integration solutions that align with each client’s business model and systems architecture. Through customized Application Programming Interface (API) integration, DigiTax ensures smooth connectivity between eTIMS, ERP, and POS platforms. Its solutions include automated reverse invoicing for small-scale suppliers, centralized compliance dashboards, and user-friendly reporting tools.
Beyond technical integration, DigiTax provides hands on support for change management and staff training. The firm also continuously monitors regulatory developments and system updates from KRA, ensuring that client solutions remain fully compliant as the tax environment evolves. For organizations seeking to streamline compliance without disrupting operations, DigiTax offers a complete end-to-end transformation pathway.
The business case for early migration to eTIMS is compelling. Beyond meeting statutory obligations, adopting eTIMS early delivers operational and financial benefits. Streamlined invoicing reduces reconciliation cycles and accelerates cash flow. Automated processes minimize human error and audit exposure, while transparent compliance enhances trust among customers, suppliers, and regulators. In a competitive landscape, proactive compliance has become not just a requirement but a differentiator.
Ultimately, the shift from TIMS to eTIMS is inevitable and the early adopters will have the advantage of familiarizing themselves with the solution. By partnering with DigiTax, organizations can convert what might seem like a compliance burden into an opportunity for operational modernization and business growth.
