Kenya Revenue Authority (KRA) is set to introduce a new tax compliance certificate tied directly to adoption of the Electronic Tax Invoice Management System, signalling a firmer push to lock businesses into the digital invoicing regime.
The forthcoming Merchant Tax Compliance Certificate will go beyond the current Tax Compliance Certificate, which largely monitors return submissions and tax payments. Under the revised framework, firms will need to demonstrate full compliance with eTIMS in order to secure the new credential.
By linking certification to eTIMS usage, the authority intends to compel businesses to ensure that all expenditure is supported by legitimate electronic tax invoices. Tax compliance certificates are often indispensable for commercial operations, from bidding for public tenders and clearing goods at customs to obtaining or renewing licences such as liquor permits and clearing and forwarding credentials. Individuals require them when applying for government positions, while foreign nationals must present them when seeking or renewing work permits.
KRA Commissioner General Humphrey Wattanga said the merchant certificate is designed to create fair competition by ensuring that corporate transactions are digitally recorded and verified. He argued that equitable business conditions depend on universal adherence to tax obligations and statutory charges, a message he reiterated at the 2026 AmCham Outlook Forum.
The authority is also tightening oversight of individual taxpayers, particularly those earning above Sh24,000 per month. Wattanga noted that income and expense declarations for both individuals and corporate entities are now cross-checked against data drawn from eTIMS, withholding tax records and customs import systems.
The Electronic Tax Invoice Management System requires businesses to generate digital invoices for taxable supplies, enabling real-time monitoring of sales for value-added tax purposes. From January 1, KRA began automatically reconciling declared income and expenses with live eTIMS data and third-party records.
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Recent audits of the withholding tax register uncovered substantial discrepancies, with KRA investigators identifying more than 392,000 companies and high-net-worth individuals owing an estimated Sh759.7 billion. In several cases, taxpayers reported minimal or zero income despite counterparties declaring payments to them. The enforcement drive could result in measures such as travel restrictions, asset freezes and suspension of Personal Identification Numbers.
The authority says the digital shift is already bearing fruit. Monthly domestic VAT collections have climbed to between Sh28 billion and Sh30 billion, up from roughly Sh20 billion previously, buoyed by the rule that all supply transactions must be supported by eTIMS-generated invoices.
