The Kenya Revenue Authority (KRA) has rolled out one of its strongest measures yet in the fight against fake electronic tax invoices.
The taxman is now georeferencing every invoice generated on the eTIMS system, meaning each electronic invoice will be permanently linked to the exact physical location where it was issued.
The goal? To make it much harder for businesses to create and use fictitious invoices worth billions of shillings every year.
The Scale of the Problem
According to KRA Commissioner for Micro and Small Taxpayers George Obell:
“Almost every month we are dealing with between Sh2 billion and Sh2.5 billion worth of Value Added Tax in fictitious invoices.”
When you annualise that figure, the total value of fake invoices circulating in the Kenyan economy is estimated to be around Sh30 billion per year — a massive revenue leak that the government wants to close.
Many businesses have been using fake invoices to:
- Inflate expenses
- Reduce taxable profit
- Lower their income tax bill
- Claim wrongful input VAT refunds
How Georeferencing Will Work
From now on, when a business generates an eTIMS invoice, the system will automatically record and lock in the precise GPS coordinates of the location where the invoice was created.
This simple but powerful change means:
- KRA will easily see whether multiple suspicious invoices are all coming from the same location
- It becomes very difficult to issue fake invoices from imaginary or non-existent business premises
- Authorities can quickly identify fraud hotspots
Several countries already use similar location-based controls successfully (Germany, Switzerland, Brazil, Netherlands), mostly in areas such as property valuation, land transactions, and infrastructure billing.
Kenya is now bringing the same technology to everyday business invoicing.
Income & Expense Validation Rush + Special Table Pressure
The move comes at a time when KRA is carrying out full income and expenditure validation for the year 2025.
All taxpayers must now support their declared expenses with valid eTIMS invoices, withholding certificates, import documents, etc.
Section 16(1)(c) of the Income Tax Act is very clear: you can only claim expenses that are supported by proper eTIMS invoices.
This legal requirement has triggered:
- A mad rush by many businesses to obtain genuine eTIMS invoices
- A parallel surge in fake invoice syndicates trying to supply the demand
At the same time, KRA continues to use the powerful Special Table mechanism to fight the fraudsters.
Who Ends Up on the Special Table?
Currently, around 100,000 taxpayers are listed, including:
- Missing Traders—businesses that issue invoices but never declare corresponding income
- Non-filers—businesses that have not filed VAT returns for six months or longer
- Nil filers with input claims—businesses that file nil returns yet others claim input VAT from them
- Chronic non-payers—taxpayers who file but never pay the tax due
- Non-compliant eTIMS users
Once placed on the Special Table:
- You cannot file normal VAT returns
- Legitimate businesses usually refuse to transact with you (because they cannot claim input VAT)
- You can only be removed after visiting a KRA Tax Service Office and regularising your affairs
Many of the oldest cases (some dating back two years) have made no attempt to come forward and regularise.
Next Big Step: Stock Management Module Coming Soon
KRA is not stopping at georeferencing.
The authority has confirmed that it is developing a stock management module inside the eTIMS system.
Once live, the system will:
- Track the actual stock levels of businesses
- Only allow invoices to be issued for goods/services that are supported by available stock
- Make it extremely difficult to issue invoices for goods that were never purchased or never existed
Commissioner Obell explained:
“We will soon have a Stock Management Module within eTIMS… It is a tracker… to ensure that they can only supply what is in their stock.”
Fuel Stations Also in Focus
The commissioner specifically mentioned that eTIMS invoice fraud at fuel stations is receiving special attention.
Given the huge volumes and value of transactions in the petroleum sector, tighter controls here could recover very significant amounts of revenue.
Bottom Line for Businesses
Kenya is rapidly moving into a new era of digital tax enforcement:
- Every eTIMS invoice now carries a permanent location fingerprint
- Fake invoices will be much easier to detect and trace
- The Stock Management Module will add another very strong layer of control
- The Special Table continues to be a very painful commercial penalty for fraudsters
For honest taxpayers, the message is clear:
→ Use eTIMS properly. → Keep genuine records. Issue and claim only real invoices
For anyone still thinking of playing games with fictitious invoices, the net is closing very fast.
The days of easy Sh30 billion-a-year fraud are rapidly coming to an end.
