NAIROBI, Kenya — The Kenya Revenue Authority (KRA) has introduced a new Merchant Tax Compliance Certificate aimed at tightening enforcement of the Electronic Tax Invoice Management System (eTIMS) across the business sector.
Unlike the standard Tax Compliance Certificate, which primarily confirms whether tax returns have been filed and taxes paid, the new certificate will also verify whether a business has fully complied with eTIMS requirements.
KRA says the move is intended to ensure that all business transactions, including expenses, are supported by electronically generated invoices that can be validated in real time.
The new certificate will be mandatory for businesses seeking to access government tenders, clear goods through customs, or apply for and renew operational licences, including liquor and clearing agent licences.
Individuals applying for government jobs, as well as foreign nationals seeking to apply for or renew work permits, will also be required to present a valid tax compliance certificate.
Speaking at the 2026 American Chamber of Commerce (AmCham) Outlook Forum, KRA Commissioner General Humphrey Wattanga said the Merchant Tax Compliance Certificate is designed to create a fair and transparent business environment.
“A level playing field can only be achieved when all businesses comply with tax obligations and statutory levies. 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,” Wattanga said.
He added that the authority is intensifying efforts to ensure that all individuals earning above 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 eTIMS platform requires businesses to issue electronic invoices for all taxable supplies, enabling KRA to monitor sales activity and value-added tax (VAT) compliance in real time.
Since January 1, KRA has been automatically validating declared income and expenses against data from eTIMS, withholding tax records, and customs import systems.
As a result, the authority says it has identified 392,162 businesses and high-income individuals allegedly owing a combined Sh759.7 billion in unpaid taxes.
Those flagged face enforcement measures that may include travel restrictions, asset freezes, and deactivation of Personal Identification Numbers (PINs).
KRA said the discrepancies emerged following an audit of the withholding tax registry, which revealed cases where taxpayers declared significantly lower income than amounts reported by entities that paid them.
In some instances, taxpayers declared no income at all, despite third parties reporting payments made to them.
The authority has previously linked the expansion of eTIMS to improved revenue performance, noting that monthly domestic VAT collections have increased to between Sh28 billion and Sh30 billion from about Sh20 billion after mandatory electronic invoicing was enforced.
The latest measures form part of KRA’s broader digital compliance strategy aimed at widening the tax base, reducing evasion, and strengthening domestic revenue mobilisation to support public expenditure.
