The Kenya Revenue Authority (KRA) has confirmed plans to introduce a new Tax Compliance Certificate (TCC) tied directly to a business’s use of the Electronic Tax Invoice Management System (eTIMS), a move aimed at accelerating the adoption of electronic tax invoices and strengthening tax compliance across the formal economy. This development marks a departure from the existing certificate process, which primarily focuses on whether a business has filed tax returns on time and paid its tax liabilities.
In announcements made in October 2025 and reiterated by KRA in February 2026, the authority outlined that the new certification will require businesses to show full compliance with eTIMS requirements before they can obtain the updated certificate, often referred to as the Merchant Tax Compliance Certificate.
Under the proposed framework, businesses seeking the new certificate will need to demonstrate that they issue electronic tax invoices through eTIMS and that all their transactions are digitally captured and transmitted in real time. The system was introduced as part of broader tax reforms under the Tax Procedures (Electronic Tax Invoice) Regulations, 2024, which require businesses to generate electronic tax invoices for all sales transactions that are then transmitted to KRA for validation.
KRA Commissioner General Humphrey Wattanga Mulongo said the new certificate is intended to help create a fair business environment by ensuring that all transactions are captured electronically and validated. “A level playing field can only be achieved when all businesses comply with tax obligations and statutory levies,” he said during a February 2026 presentation to stakeholders. He emphasised that the new certification will promote stronger compliance across the business community and support accurate tax reporting.
The existing TCC is typically used to prove that a taxpayer is compliant with their tax filing and payment obligations, for example when applying for government tenders, licences, work permits or customs clearance. Linking the certificate to eTIMS compliance expands its purpose to include digital invoice management as a core indicator of tax transparency and compliance.
The requirement for eTIMS compliance means that businesses must be registered on the electronic invoicing platform and generate eTIMS receipts for their sales. Public notices from KRA also underscore that eTIMS compliance is essential for ensuring that all declared income and expenses in tax returns are backed by valid electronic tax invoices, and that such validation commenced as part of the income and expense validation process effective January 2026.
Some business owners have expressed concern about the transition, especially smaller enterprises that may face challenges in integrating eTIMS into their operations due to technology and connectivity constraints. However, the new compliance certification is expected to encourage wider adoption of digital invoicing and help reduce tax fraud by making it harder to under-report income or claim unsupported expenses.
As the new Merchant Tax Compliance Certificate becomes operational, businesses will need to prioritise eTIMS adoption, maintain accurate digital invoice records, and align their internal processes with KRA’s digital compliance expectations. The shift underscores the authority’s commitment to modernising tax administration and promoting transparency through the use of digital tools and real-time data verification.
