KRA eTIMS and Expense Claims: What Finance Teams Must Keep (2026)

Short answer: Since 1 January 2024, business expenses in Kenya generally need to be supported by an electronic tax invoice issued through KRA's eTIMS to be tax-deductible, and KRA now checks expenses claimed in returns against eTIMS records. For every expense claim and supplier payment, keep the eTIMS invoice itself, its invoice number and the supplier's KRA PIN with the request and its approvals. The simplest control is a workflow rule: no invoice, no approval.

This article is for finance managers, accountants and internal auditors at Kenyan organisations who approve staff claims, petty cash and supplier invoices. It explains the rules in general terms and how to build them into an approval process. It is not tax or legal advice. eTIMS rules, exemptions and KRA practice change; confirm the current position with your tax adviser before changing policy.

What is KRA eTIMS?

The electronic Tax Invoice Management System (eTIMS) is KRA's system for issuing and transmitting tax invoices. Businesses issue invoices through an eTIMS solution (online portal, mobile, software integration or a device), and each invoice is recorded with KRA. It extended the earlier TIMS regime, which applied mainly to VAT-registered businesses, to a much wider group of businesses, including many that are not registered for VAT.

For finance teams paying suppliers or reimbursing staff, eTIMS matters less as an invoicing tool than as evidence: an eTIMS invoice is what shows KRA that the expense was real and was declared by the supplier.

Why eTIMS matters for expense claims

The Finance Act, 2023 tied the deductibility of business expenses to eTIMS. In practical terms:

• Deductibility. From 1 January 2024, an expense generally has to be supported by a valid eTIMS invoice to be allowed as a deduction when computing taxable income. An expense without one may be disallowed.
• Return checks. KRA now checks the expenses claimed in income tax returns against invoices recorded in eTIMS. Differences can lead to queries, adjustments, additional tax, penalties and interest.
• Input VAT. VAT-registered businesses have long needed valid tax invoices to claim input VAT; eTIMS is how those invoices are now issued.

The consequence for expense management is simple: a receipt photographed on a phone, or a handwritten voucher, may no longer be enough to support the tax treatment of a payment, even if it is enough for internal approval.

What is exempt from eTIMS expense validation?

Not every expense needs an eTIMS invoice. KRA publishes a list of expenses that are exempt from the eTIMS requirement, typically covering costs that are already documented through another official channel. Examples that have appeared on that guidance include employment costs paid through payroll and imported goods supported by customs documentation.

Treat this as a pointer, not a list to rely on. Check the current KRA guidance with your tax adviser, record which exemption applies to each exempt category in your expense policy, and make the approver see that reason on the request rather than guessing.

What finance teams should keep with each expense claim

A useful rule is that the request, the invoice and the decision should sit together, so anyone reviewing a payment later does not have to search three systems.

For staff reimbursements, the invoice should be issued by the supplier (the restaurant, hotel or shop), not by the employee. Ask staff to request an eTIMS invoice at the point of purchase, with your organisation's PIN on it where the supplier supports that, because it is much harder to obtain one afterwards.

Where eTIMS problems usually appear in expense processes

• Petty cash. Small purchases from small suppliers are the most likely to arrive without an eTIMS invoice. Decide in policy whether such spend is allowed and how it is treated for tax.
• Field and M-Pesa payments. Payments to individuals and small traders for services may need a different document entirely. Agree the treatment with your adviser.
• Late invoices. A supplier promises to "send the invoice later" and the payment goes out first. Once paid, there is little leverage to get the invoice.
• Mismatches. The invoice shows a different amount, date or supplier from the request. A reviewer comparing the two before approval catches most of these.
• Lost documents. Invoices kept in email inboxes or on phones are not available at audit or when KRA raises a query.

How to enforce "no invoice, no approval" in an expense workflow

A policy only works if the process makes it hard to skip. In an approval workflow that can mean:

1. Make the invoice attachment mandatory for request types where one is required, such as supplier invoices and reimbursements.
2. Capture the invoice number and supplier PIN in fields on the request, so they can be reported on, not only read from an image.
3. Put a finance review stage before final approval. The finance reviewer opens the invoice, checks it against the request, and, where your policy requires, checks it in KRA's own tools. If it fails, the request is returned, not paid.
4. Record exemptions explicitly, with a reason, rather than letting approvers wave requests through.
5. Pay only after final approval, so no payment goes out before the documents are checked.
6. Keep everything together in a governed document store linked to the request and its approvals, with a retention period that matches your tax and audit obligations.
7. Review exceptions monthly: requests approved under an exemption, and requests returned for missing or mismatched invoices.

For the audit side of this, see audit-ready expense workflows. For a full picture of the process, see our complete guide to expense management.

What to ask expense software vendors about eTIMS

When you evaluate software, be precise about what "eTIMS support" means. Vendors use the phrase for very different things:

• Does the system validate an invoice against KRA records, or only store the invoice document?
• If it validates, how, and what happens when KRA's systems are unavailable?
• Can invoice number and supplier PIN be mandatory fields for some request types and not others?
• Can finance report on requests without an eTIMS invoice, or approved under an exemption?
• Where are invoices stored, for how long, and who can delete them?

Our expense management software buyer's guide covers the other evaluation criteria.

Where Creodata fits

To be clear about scope: Creodata's expense management system does not validate eTIMS invoices and is not integrated with eTIMS or KRA. What it does is keep the evidence with the decision. Each supplier invoice, petty cash or cashbook payment request is submitted with its attachments, and every attachment, including the eTIMS invoice document, is stored in SharePoint Online and linked to the request. The request then moves through a configurable multi-stage chain such as Head of Department, Finance Reviewer and CFO, with automatic escalation of overdue approvals and an audit entry for each step.

Finance can use that structure to enforce "no invoice, no approval" by process: the finance reviewer stage is where the invoice is checked, and a request without the right document is not approved. Payment over M-Pesa happens only on final approval, the payment reference is written back to the request, and the approved item posts to Microsoft Dynamics 365 Business Central with its SharePoint documents linked. When KRA or an auditor asks about a payment, the request, invoice, approvals and payment reference are in one place.

If you want to see how that works on your own request types, book a demo.

Frequently asked questions

Do all business expenses in Kenya need an eTIMS invoice?

Generally, business expenses need to be supported by an eTIMS invoice to be tax-deductible, but KRA publishes a list of exempt expenses. Confirm which of your expense categories are exempt with your tax adviser and record that in your expense policy.

What happens if an expense is claimed without an eTIMS invoice?

The expense may be disallowed as a deduction, which increases taxable income, and KRA may raise an assessment with penalties and interest. Internal approval does not change the tax treatment.

Can staff claim reimbursement with an ordinary receipt?

Your policy decides whether you reimburse, but for tax the expense generally needs an eTIMS invoice from the supplier. Many organisations now require staff to request an eTIMS invoice at the time of purchase and return claims that lack one.

Does expense management software validate eTIMS invoices?

Some products may offer validation or integration; many only store the invoice document. Ask each vendor exactly what they do. Creodata's system stores the invoice with the request and approvals but does not validate it with KRA.

How long should we keep eTIMS invoices and expense records?

Keep them for at least the period required by Kenyan tax law and your auditors, and longer if donor or regulatory rules require it. Confirm the retention period with your tax adviser and apply it in your document store.

Who should check the eTIMS invoice: the approver or finance?

Finance is usually better placed, through a dedicated finance review stage before final approval. Line managers approve the business purpose; finance confirms the document supports the payment and its tax treatment.