Kenyan businesses are facing closer tax checks as the Kenya Revenue Authority steps up enforcement of the Electronic Tax Invoice Management System, commonly known as eTIMS.

Audit firm KPMG issued the warning on Tuesday, February 3, saying KRA has shifted from periodic, summary-style reporting to ongoing review of transactions as they happen.

According to KPMG, the tax authority is now relying on automated systems that compare income tax returns with multiple electronic records submitted through eTIMS and other platforms.

“What began as a VAT-focused compliance tool has now evolved into a central control pillar of income tax enforcement,” KPMG said.

Under the new approach, expenses not backed by compliant eTIMS invoices are likely to be rejected. KPMG cautioned that this could happen even where the costs were real and properly incurred.

“Taxpayers now risk having expenses unsupported by compliant electronic invoices administratively disallowed,” the firm noted, adding that this would still be subject to the law and existing appeal processes.

The implication is significant. If expenses are disallowed, businesses may face higher tax bills, plus penalties and interest.

KPMG said KRA’s position applies across the board. eTIMS compliance is mandatory for companies, partnerships, sole traders, professionals, and those earning rental income in Kenya.

To reduce risk, businesses were urged to check their records early and often. This includes matching accounting books with eTIMS data covering sales, purchases, imports, and withholding tax.

Early checks, KPMG said, help spot gaps, timing issues, and inconsistencies before KRA raises queries.

The firm also advised businesses to build eTIMS into everyday operations.

“Embed eTIMS compliance into procurement, contracting and payment processes,” KPMG said, noting that both finance teams and other staff should understand when electronic invoicing is required.

As enforcement tightens, the message from tax experts is clear: eTIMS is no longer optional paperwork. It is now central to how KRA assesses income tax.