Kenya Revenue Authority's Electronic Tax Invoice Management System (eTIMS) is now a mandatory requirement for all VAT-registered businesses in Kenya. The system requires businesses to transmit invoice data to KRA in real time — or within a defined window — using a certified device or software integration. Failure to comply exposes businesses to penalties, audit risk and ultimately the inability to claim input VAT on non-compliant purchases.
This guide explains what eTIMS actually requires, how the different integration paths work, and why the most reliable path for medium and large businesses is ERP integration with the VSCU (Virtual Sales Control Unit) API.
What Is eTIMS?
eTIMS (Electronic Tax Invoice Management System) is KRA's digital fiscal receipting system. Every VAT-registered business must use it to:
- Generate KRA-certified tax invoices (with a unique control number and QR code)
- Transmit invoice data to KRA's servers at the time of or shortly after each sale
- Generate certified credit notes and debit notes
- Maintain a digital audit trail that KRA can access for compliance verification
The ETR (Electronic Tax Register) machine many Kenyan businesses previously used is being phased out and replaced by eTIMS — which is software-based, not hardware-based.
The Three eTIMS Integration Paths
1. eTIMS Online Portal
KRA provides an online portal where businesses can manually log in and create invoices. This is appropriate only for businesses with very low transaction volumes — perhaps fewer than five invoices per day. For any business operating a POS system or generating more than a handful of invoices, manual portal entry is impractical.
2. eTIMS Client (TIMS Client Application)
KRA has released a Windows-based TIMS client application that businesses can install locally. This is a step up from the portal but still requires manual data entry or a direct integration from the POS software to the local client application.
3. VSCU API Integration (Recommended for ERP Users)
The Virtual Sales Control Unit (VSCU) API is the most robust integration path. Instead of a hardware device or a separate software client, your ERP communicates directly with KRA's API. Every invoice your ERP generates is simultaneously transmitted to KRA. No manual intervention, no separate device, no risk of forgetting.
BetaSuite ERP Suite 360 implements VSCU API integration for all invoice-generating modules: Retail POS, Touch POS (restaurant), Sales Invoices, and Delivery notes. The integration is invisible to users — they generate invoices as normal, and the eTIMS transmission happens in the background.
What Data Must Be Transmitted?
For each invoice, KRA requires:
- Seller details: PIN, name, branch
- Buyer details: PIN (for B2B), name, address
- Invoice date and time
- Sequential invoice number
- Line items: description, quantity, unit price, tax classification (taxable at 16%, zero-rated, exempt)
- Totals: subtotal, VAT amount, total amount
- Payment method: cash, M-Pesa, card, credit
KRA returns a Control Unit Invoice Number (CUIN) which must be printed on the receipt along with a QR code. Customers can scan the QR code to verify the invoice's authenticity on KRA's portal.
Tax Classification — Getting It Right
One of the most common eTIMS compliance errors is incorrect tax classification of goods and services. Kenya's VAT Act specifies which goods and services are taxable at 16%, zero-rated (0% VAT but still VAT supply), or exempt (outside the VAT system entirely). Misclassifying a sale understates or overstates VAT, creating liability.
BetaSuite maintains the item classification code (HS code and KRA item classification) against each inventory item. When an invoice is generated, the system applies the correct tax classification automatically — and transmits the correct classification to KRA.
What Happens When Transmission Fails?
eTIMS transmissions occasionally fail — internet connectivity issues, KRA server maintenance, or API errors. BetaSuite's VSCU integration includes an automatic retry queue: failed transmissions are retried at 15-minute intervals until successful. The invoice is still issued to the customer immediately; the eTIMS transmission happens asynchronously in the background.
Failed transmissions are visible in the eTIMS retry queue so finance staff can monitor compliance status and investigate persistent failures.
Penalties for Non-Compliance
KRA has the authority to impose penalties for eTIMS non-compliance, including:
- Fines for each non-certified invoice issued
- Disallowance of input VAT claims from non-compliant suppliers
- Increased audit risk — non-compliant businesses are flagged in KRA's system
- Potential prosecution for deliberate evasion
Preparing Your Business for eTIMS
If your business is not yet eTIMS compliant, the steps are:
- Register for eTIMS on the KRA iTax portal (under the eTIMS menu)
- Choose your integration path — VSCU API is recommended for ERP users
- Classify all inventory items with the correct KRA classification codes
- Configure your ERP with your eTIMS credentials and test in the sandbox environment
- Go live — all invoices from that point are automatically transmitted
BetaSuite's onboarding team assists with eTIMS configuration as part of every new implementation, ensuring businesses go live compliant from day one.