The Kenya Revenue Authority (KRA) will unveil a special tax compliance certificate for businesses that fully adopt the Electronic Tax Invoice Management System (eTIMS).
Unlike the current Tax Compliance Certificate, which primarily tracks return filing and payments, the new Merchant Tax Compliance Certificate will integrate eTIMS compliance.
By making this a requirement, the taxman aims to nudge businesses toward ensuring that all their expenses are backed by valid electronic tax invoices.
Businesses need a tax compliance certificate for various reasons, including when bidding for government tenders, customs clearance, and when obtaining or renewing various licences, such as liquor licences or clearing and forwarding agent licences.
Individuals will need tax compliance certificates when applying for government jobs, and for foreign nationals when applying for or renewing work permits.
KRA Commissioner General Humphrey Wattanga said the issue of the merchant tax compliance certificate will level the playing field by ensuring all corporate transactions are electronically captured and validated for enhanced transparency.
“A level playing field can only be achieved when all businesses comply with tax obligations and statutory levies,” he said while speaking at the 2026 AmCham (American Chamber of Commerce) 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,” said Mr Wattanga.
He also said the KRA is implementing initiatives to ensure that all individuals earning more than Sh24,000 per month pay their fair share of taxes.
“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 said.
The e-TIMS is a digital platform that requires businesses to issue electronic tax invoices for taxable supplies, allowing the KRA to track sales in real time for value-added tax (VAT) compliance.
Effective January 1, the KRA started to automatically validate declared income and expenses against real-time eTIMS data, withholding tax records, and customs imports.
KRA detectives have identified 392,162 firms and wealthy individuals owing Sh759.7 billion, setting the stage for travel bans, asset freeze and deactivation of Personal Identification Numbers.
The taxman unearthed the alleged tax cheats and dodgers in the wake of an audit of the withholding tax registry, which revealed that the self-declared income was substantially lower than the amounts reported by third parties paying for the taxpayers’ services.
In some instances, the taxpayers declared nil returns despite the firms they did business with declaring payments to them.
Earlier, the KRA disclosed that monthly domestic VAT collections have risen to between Sh28 billion and Sh30 billion, up from Sh20 billion, lifted by a requirement that all supply transactions be accompanied by eTIMS-generated tax invoices.
The government plans to increase tax collection and cut debt after years of ramped-up borrowing to build infrastructure.
With opposition to new and higher taxes, the KRA is racing to bring more people into the tax bracket and curb cheats and dodgers in the quest to meet revenue targets.
