Let us be honest about something. When the Kenya Revenue Authority first announced eTIMS, a lot of business owners thought it was another government system they could deal with later. Then later became 2026, and KRA started validating every declared income and expense directly against eTIMS records. Returns are being rejected. Expenses are being disallowed. Audits are being triggered. And businesses that delayed are now scrambling to catch up.

If you are reading this because you have not yet generated a single eTIMS invoice, or because you are not entirely sure whether what you are doing is actually compliant, you are in the right place. This guide will walk you through everything, clearly, without the tax jargon that makes most compliance guides impossible to follow.

And if you are a business owner who is tired of manually logging into portals every time you make a sale, there is a section at the end that will show you how to remove that manual step entirely through ERP integration. That is where Aqiq Solutions’ ERPNext implementation becomes genuinely relevant to your daily life.

What Is eTIMS and Why Does It Affect Every Business in Kenya?

eTIMS stands for Electronic Tax Invoice Management System. It is KRA’s platform for real-time transmission of invoice data from businesses to the tax authority. Every time your business makes a sale, the invoice details must be generated through eTIMS and transmitted to KRA, either instantly or near-instantly, depending on your setup.

This replaced the old Electronic Tax Register (ETR) machines that VAT-registered businesses used to carry. But eTIMS goes much further than ETRs ever did. It applies to every person in business in Kenya, not just VAT-registered entities. That includes sole traders, partnerships, limited companies, professionals, consultants, and any entity generating income from a business activity.

The Finance Act 2023, anchored in Section 23A of the Tax Procedures Act, made this mandatory. Section 16(1)(c) of the Income Tax Act now explicitly states that all expenditure deducted from taxable income must be supported by eTIMS-generated invoices. This is the legal foundation. There is no grey area.

Now that the stakes are clear, let us look at how to actually do this.

Before You Generate Your First eTIMS Invoice: What You Need in Place

Three things must be in place before you can generate a valid eTIMS invoice. If any of these are missing, sort them out first before proceeding to the steps below.

• An active KRA PIN. Every business must have a valid KRA PIN registered on the iTax portal at itax.kra.go.ke. If you do not have one, register there first. This is the foundation of everything.
• eTIMS registration on your KRA profile. Having a KRA PIN is not the same as being registered on eTIMS. You need to specifically activate eTIMS within your iTax profile. This is done on the iTax portal under the eTIMS section and is now a self-service process, meaning KRA no longer needs to manually approve your application.
• An appropriate eTIMS solution chosen for your business type. Not every business uses the same eTIMS pathway. The right solution depends on your size, whether you are VAT-registered, and whether you want to integrate eTIMS with a POS or ERP system. We cover the options below.

Which eTIMS Solution Is Right for Your Business?

KRA offers several eTIMS access methods. Choosing the right one matters because it affects your daily workflow significantly. Here is a clear breakdown.

Step-by-Step: How to Generate an eTIMS Invoice via the KRA Portal

This walkthrough covers the full eTIMS portal route, which applies to most medium and larger businesses. The eCitizen route follows a very similar sequence with slight label differences.

1. Log in to the eTIMS Portal

   Go to etims.kra.go.ke and enter your KRA PIN and your eTIMS login password. If you are accessing for the first time after registration, use the temporary password sent by KRA and change it immediately. You can also access eTIMS through eCitizen at ecitizen.go.ke by navigating to KRA Services after logging in with your standard eCitizen credentials.

2. Navigate to the Invoice / Sales Section

   Once inside the dashboard, locate the “Sales” or “Transaction Management” section from the main menu. Then click “Sales Receipts” or “Create Invoice,” depending on which version of the portal you are on. This opens the invoice generation form. Take a moment here to confirm the date and your seller details are already pre-filled correctly.

3. Enter the Buyer’s Details

   For business-to-business (B2B) transactions, enter the buyer’s KRA PIN. This is mandatory for B2B invoices and allows the buyer to claim the invoice as a deductible expense on their tax return. For retail or business-to-consumer (B2C) transactions where the buyer is an individual customer, buyer details may be optional or simplified. Always verify a buyer’s KRA PIN using the KRA PIN checker on iTax before entering it, especially for large transactions. An incorrect PIN causes the invoice to fail validation.

4. Itemise Your Goods or Services

   Add each product or service being sold. For each line item, enter the item name, a brief description, the quantity, and the unit price. The system will calculate totals automatically. Make sure each item is mapped to the correct tax category. VAT-registered businesses must assign the correct VAT rate (16% standard, 0% zero-rated, or exempt) to each item. Getting this wrong is one of the most common causes of invoice rejection and later audit queries.

5. Review the Invoice Before Submitting

   Before you click submit, double-check everything. Seller KRA PIN and name, buyer KRA PIN and name (for B2B), item descriptions, quantities, unit prices, tax amounts, and the total. This matters because you cannot delete an eTIMS invoice once it has been generated. If you make an error after submission, you must issue a credit note to offset the incorrect amount. Getting the review step right saves you that extra work.

6. Submit and Receive Your eTIMS Invoice Number and QR Code

   Once you confirm and submit, the system transmits the invoice to KRA in real time. On successful validation, KRA assigns a unique invoice number and generates a QR code embedded in the invoice. This QR code is what makes the invoice officially compliant. It allows anyone, including your buyer and any KRA auditor, to verify the invoice details on the KRA portal instantly. Download or print the invoice and send it to your buyer. For B2B transactions, the system also automatically sends the invoice to the buyer’s registered email address.

Step-by-Step: How to Generate an eTIMS Invoice on Phone via USSD

For traders without smartphones or reliable internet, KRA’s USSD option provides a practical route to compliance. Here is the exact sequence.

1. Dial *222# on Your Mobile Phone

   Use the mobile number that is registered on your iTax account. This is the same number KRA uses to send OTPs and official notifications. Using a different number will cause authentication to fail.

2. Select KRA Services Then eTIMS

   From the USSD menu, select option 5 for KRA Services, then option 4 for eTIMS. The menu items may shift slightly with system updates, but the eTIMS option will be clearly labelled.

3. Select Sales Invoice

   Choose the Sales Invoice option. You will then be prompted to enter the customer’s name, KRA PIN, or customer reference number. For individual retail customers without a PIN, enter the customer name as displayed on the prompt.

4. Enter Item and Price Details

   Enter the product or service name, the quantity, and the price per unit. The system calculates the total and displays it for your confirmation before finalising.

5. Confirm and Receive Your Invoice Confirmation

   Confirm the transaction details. The invoice is generated and transmitted to KRA. You receive an SMS confirmation with the invoice reference number. The generated invoice will be automatically sent to the buyer’s registered email if a KRA PIN was provided.

What a Valid eTIMS Invoice Must Contain

Every eTIMS invoice, regardless of the method used to generate it, must contain specific fields to be considered legally compliant. If any of these are missing, the invoice is not valid for tax deduction purposes, even if it was generated through the eTIMS system.

Penalties for Non-Compliance: What You Are Risking

The consequences of not being eTIMS-compliant in 2026 are concrete and actively being enforced. This is not a theoretical risk.

Beyond the penalties, there is a growing commercial consequence. Businesses and government procurement offices across Kenya are increasingly refusing to engage suppliers who cannot issue valid eTIMS invoices. Non-compliance is no longer just a tax liability. It is also costing businesses contracts and customers.

Common eTIMS Errors and How to Fix Them

If you are having trouble with invoice generation or transmission, these are the most common problems and their fixes.

• Invalid buyer KRA PIN. Always verify a buyer’s PIN using the KRA PIN Checker on iTax before entering it. An incorrect PIN causes the invoice to fail validation at the KRA end and the buyer cannot claim the expense. This is the single most common error for B2B transactions.
• “eTIMS unable to sync invoice” error. This is usually caused by a network timeout, a KRA server issue, or a data mismatch. Check your internet connection first, then verify the buyer PIN and item tax codes, then resubmit. Do not generate a duplicate invoice; wait for the system to confirm rejection before resubmitting.
• Wrong tax code applied to an item. Applying 16% VAT to a zero-rated or exempt product, or vice versa, creates a compliance mismatch. Map your products and services to their correct KRA tax categories when you set up your system. If you are unsure about a product’s tax classification, check with a tax professional before proceeding.
• Duplicate invoice submission. If a network issue causes you to resubmit an invoice that was already transmitted, KRA’s system will flag it as a duplicate. Check the invoice number checker on iTax first to confirm whether the original was received before resubmitting.
• OTP not received during login or registration. This happens when the mobile number on your iTax account is outdated or inactive. Update your mobile number on your iTax profile before attempting eTIMS registration or login. You can only receive the OTP on the number registered with KRA.
• Trying to delete a submitted invoice. eTIMS invoices cannot be deleted once generated. If you issued an incorrect invoice, you must generate a credit note for the amount you need to reverse. The credit note process is available in the same portal under the Transaction Management section.

The Better Way: Automate eTIMS With an ERP System

If you are running a business that generates more than a handful of invoices per day, logging into a portal manually for every transaction is not a sustainable process. It slows your team down, increases the chance of missed invoices, and creates a compliance gap every time someone forgets or makes an error.

The smarter approach is to integrate your business management system directly with eTIMS via the API, using either a Virtual Sales Control Unit (VSCU) for bulk or offline-capable integration, or an Online Sales Control Unit (OSCU) for businesses that are always online. When this integration is in place, every sale you record in your system automatically generates a compliant eTIMS invoice and transmits it to KRA in the background, with no manual step required from your team.

This is exactly how Aqiq Solutions configures ERPNext for businesses in Kenya. The POS module processes a sale, the accounting module records it, and the eTIMS module transmits the invoice, all simultaneously, all automatically. Your cashier completes the transaction and the compliance happens behind the scenes.

This matters for a few reasons beyond convenience. It eliminates the single biggest source of eTIMS non-compliance among growing businesses, which is human error during manual data entry. It also creates a clean, timestamped audit trail that is always available if KRA comes knocking. And because the invoicing, accounting, and stock records are all connected in ERPNext, the data that goes to KRA always matches the data in your books, which is exactly what the 2026 validation framework is checking for.

For wholesale and distribution businesses, where hundreds of invoices may go out in a single day, manual eTIMS entry is essentially impossible at scale. For retail businesses with busy checkout counters, the same applies. ERP integration is not a luxury addition for these businesses. It is the only practical path to full compliance.

What Happens When Your Supplier Is Not eTIMS-Compliant?

This is a problem many Kenyan businesses are quietly sitting with. You buy from a supplier. They give you a handwritten receipt or a basic invoice. You claim that expense in your tax return. KRA cross-checks against eTIMS data and the expense is disallowed, because your supplier never transmitted that invoice.

The consequence lands on you, not on your supplier. Your taxable income goes up. You pay more tax than you owe. And the onus is on you to fix it.

There are two practical options when your supplier is not eTIMS-registered. If your supplier is a VAT-registered business, you must demand they issue you a proper eTIMS invoice before you process payment. Make this a standard policy, not a request. Update your supplier agreements to include a tax compliance clause stating that payment will only be released against a valid eTIMS invoice.

If your supplier is a small informal trader who is not VAT-registered, you can use KRA’s Reverse Invoicing or Buyer-Initiated Invoicing feature. This allows you to generate an eTIMS invoice on behalf of your supplier through the eCitizen portal, using their KRA PIN. The generated invoice is valid for your expense claim. You cannot use this method if your supplier is VAT-registered.

To access buyer-initiated invoicing: log in to eCitizen, go to KRA Services, navigate to eTIMS, and select the Buyer-Initiated Invoice option. Enter the supplier’s ID or KRA PIN and the transaction details. The system generates a valid eTIMS receipt for your records.

Stop Thinking About Compliance. Start Automating It.

Generating eTIMS invoices manually through a portal is manageable when you are just starting out. But for any business with real transaction volume, it creates a daily compliance task that is easy to deprioritise, easy to get wrong, and increasingly consequential when something slips.

The cleanest solution is to remove the manual step entirely. When your business runs on a properly configured ERP system with eTIMS integration, every sale your team completes triggers an automatic, compliant, KRA-transmitted invoice without anyone logging into a portal. The QR code appears on the customer’s receipt. The data goes to KRA. The record sits in your accounts. All of that happens in the background while your team focuses on serving customers.

That is what Aqiq Solutions builds for businesses across Kenya, from single-location retailers to multi-branch wholesale operations to manufacturers and distributors. The starting point is always a conversation about your current setup, your transaction volume, and what compliance looks like for your specific operation.