How e-invoicing is changing tax administration in Kenya

Kenya’s e-invoicing journey, formalised through the VAT (Electronic Tax Invoice) Regulations of 2020 and advanced by eTIMS in 2023, is a cornerstone of the country’s tax digitisation efforts.

eTIMS, a cloud-based platform, mandates businesses to generate and transmit electronic invoices in real-time to the KRA, replacing cumbersome paper-based processes.

By March 2024, this requirement extended to all businesses, regardless of VAT registration, ensuring comprehensive tax compliance across various sectors.

The system’s impact is profound: it reduces tax evasion by capturing transaction data instantly, enhances transparency, and streamlines VAT reporting. For instance, reports have shown that eTIMS boosts compliance significantly, with measurable effects across all sectors.

Beyond compliance, e-invoicing drives operational efficiencies. Real-time invoice validation minimises errors, accelerates cash flow management, and provides businesses with actionable financial insights.

Read: VAT compliance a necessity for fair business environment, not burden

For Kenya’s petroleum sector, mandatory eTIMS adoption since June 2025 was aimed at curbing underreporting, potentially increasing revenue collection.

The KRA’s developer platforms, such as GavaConnect, further amplify this impact by enabling API-driven integrations, fostering innovation in how businesses manage tax obligations. In my view, eTIMS is not just a regulatory tool; it’s a strategic enabler for Kenya’s ambition to lead Africa’s digital economy.

Fintechs are at the heart of e-invoicing’s success in Kenya.

The challenges for small and medium enterprises (SMEs), are limited tech infrastructure and high setup costs that hinder adoption. We address this through scalable, affordable and innovative solutions, making compliance accessible even in rural areas with limited connectivity.

Our role extends beyond technology providing our clients with quick turnaround implementation of eTIMS, training, support, reports, dashboards and reconciliation tools to enable efficient VAT reporting. Fintechs, in my opinion, are not just facilitators but innovators, turning regulatory mandates into opportunities for operational excellence and competitive advantage.

Kenya’s e-invoicing success offers a blueprint for Africa. We are already supporting tax digitisation efforts beyond Kenya to countries like Nigeria, Zambia and exploring other countries as a catalyst for this transformation.

Our commitment is to provide a harmonised, technology-driven tax ecosystem where regulators and businesses collaborate seamlessly. For regulators, this means adopting interoperable standards. I believe Africa’s tax future lies in public-private partnerships, where fintechs bridge the gap between regulatory ambition and practical implementation.

The evolution of e-invoicing in Kenya and beyond is more than a compliance exercise as it’s a gateway to a transparent and inclusive economy.

We remain committed to leading this change, embedding tax-smart solutions into our payment and commerce platforms.

To regulators, I urge the adoption of flexible, scalable systems that empower businesses of all sizes. To CFOs and business leaders, my advice is to embrace e-invoicing as a strategic asset, invest in integrations, partner with fintechs, and turn compliance into a driver of growth.

I see a future where e-invoicing is not only mandatory but will evolve into integrations with real-time payment solutions, enabling instant and efficient payment of tax dues. Additionally, we cannot overlook the adoption of AI and its potential to improve processes and systems for greater efficiency. This will allow businesses to enhance reporting and regulators to curb tax evasion.

As Africa’s digital tax landscape evolves, we stand ready to shape its future ensuring that tax systems not only collect revenue but also foster innovation and trust. The journey has begun; let’s lead it together.

The writer is chief financial officer at interswitch East Africa Ltd. Email: [email protected]