Some oil marketing companies in Kenya are resisting the implementation of the Electronic Tax Invoice Management System (eTIMS) at fuel stations, raising concerns about installation and maintenance costs even as the Kenya Revenue Authority (KRA) says the system is necessary to track fuel sales in real time and curb tax evasion in the Sh1 trillion petroleum sector.
The standoff stems from a version of eTIMS specifically tailored for the fuel sector, which unlike standard eTIMS solutions carries additional costs for petrol retailers. According to industry sources, oil marketing companies (OMCs) have been informed that installation costs could range from Sh20,000 to Sh200,000 per station, with ongoing annual maintenance fees and monthly charges of between Sh5,000 and Sh12,000, depending on negotiations with system vendors.
Oil marketers argue that these costs are burdensome, particularly for smaller and rural fuel outlets that operate on thin margins. The concerns have slowed the uptake of the eTIMS fuel module, as some players push back against what they view as avoidable operational expenses that could add to the cost of doing business.
The KRA, however, maintains that integrating fuel stations into eTIMS is a critical step in improving tax compliance and reducing revenue leakage. The tax authority has begun onboarding fuel retailers onto the system, reporting that more than 500 fuel stations about 16 percent of the national network are already integrated. The eTIMS fuel module is designed to provide end to end visibility of petroleum transactions, from importation through retail sale, enabling automatic reconciliation of physical fuel volumes against declared sales and tax liabilities.
KRA officials have said they expect double digit growth in tax revenues from the petroleum sector once eTIMS is fully implemented nationwide, reflecting the authority’s belief that improved transparency will close existing gaps between actual sales and revenue declared for tax purposes.
The push for integration comes as the petroleum sector remains a major contributor to government revenue through value added tax (VAT), excise duty and other levies. Historically, under declaration of fuel sales and fragmented reporting have made it difficult for authorities to assess the true volume of taxable transactions in the industry. The eTIMS platform aims to modernize compliance through digital invoicing, with every sale generating a time stamped electronic tax invoice that is automatically transmitted to KRA.
Despite the perceived benefits, resistance among some oil marketers highlights a broader challenge in tax digitization initiatives ensuring that compliance costs do not disproportionately impact smaller businesses or create barriers to adoption. Some fuel outlets are lobbying for subsidies or phased fee structures to reduce the financial burden of integration, arguing that a more gradual rollout could help mitigate short term costs while still achieving long term compliance objectives.
Industry stakeholders also point out that the rollout has been phased, with initial voluntary trials in selected stations between September and December 2024, and extended deadlines of June and then December 2025 to give operators more time to prepare and transition to the new system.
The ongoing discussions between KRA and oil marketers emphasize the need to balance tax enforcement goals with operational realities in the petroleum sector. As the authority continues to expand eTIMS to more stations in 2026, addressing concerns about installation and maintenance costs may be essential to achieving broader compliance and realizing the potential revenue gains that digital monitoring promises.
