Kenya Revenue Authority (KRA)’s eTIMS Fuel Station System takes effect today, June 30, 2025.
All fuel stations are required to integrate with KRA either directly or through approved third-party providers listed on the KRA website. This mandate was announced by the tax authority back in May.
This eTIMS Fuel Station System allows for real-time invoicing by integrating directly with fuel pumps, point-of-sale (POS) systems, and sales systems, all designed to enforce VAT compliance.
Under the Kenya Kwanza government, Kenya is actively working to boost tax revenue and eliminate tax cheats. For starters, this move will help prevent petrol stations from under-declaring sales, which they do to artificially narrow their profits and pay lower taxes.
Secondly, it will act as an impediment to tax cheats. The eTIMS system requires businesses to file receipts or invoices directly with the KRA as proof of expenses.
However, some unscrupulous traders have been collecting discarded fuel station receipts (those not taken by motorists) and using them to fraudulently claim VAT refunds from the tax authority, pretending their businesses consumed the fuel.
Going forward, motorists will need to enter their KRA Personal Identification Numbers (PINs) to generate an eTIMS receipt. This increased visibility into sales will also help the KRA track motorists’ spending habits, specifically targeting those with high fuel expenses but low tax remittances.
“This evolution broadened the coverage to include all persons in business, irrespective of VAT registration status. Under the new framework, a compliant electronic tax invoice must now accompany every sale regardless of the value,” wrote the tax collector in a statement.
eTIMS Tax Deduction
The Kenyan government also amended the Income Tax Act, effective January 1, 2024.
This change dictates that only expenses supported by eTIMS invoices will be eligible for tax deductions, preventing anyone from lowering their tax burden using invoices generated outside the eTIMS system. This amendment set the stage for KRA’s subsequent directives on eTIMS.
The implementation of eTIMS (electronic Tax Invoice Management System) has been credited with significantly improving compliance among VAT-registered taxpayers, leading to domestic VAT collections surpassing their target by Sh6.3 billion.
