The Kenya Revenue Authority (KRA) has completed the integration of its Electronic Tax Invoice Management System (eTIMS) with the government's Integrated Financial Management Information System (IFMIS), making valid eTIMS invoices a precondition for suppliers seeking payment from government entities.

In a public notice issued on Monday in collaboration with the National Treasury, KRA said suppliers must generate valid eTIMS invoices for all supplies before submitting claims for payment through IFMIS, with invoice details required to match exactly across both systems. The authority said the integration will support automated validation of tax invoices and enable more seamless financial processes across government institutions, describing it as a milestone in the government's Digital Transformation Agenda.

The move ties two of the government's core back-office systems together in a way that directly affects cash flow for anyone selling to the state: a supplier whose invoices cannot be validated in eTIMS will, in effect, be unable to complete a payment claim through IFMIS. It also extends the reach of eTIMS, which Kenya introduced under its electronic tax invoicing framework requiring VAT-registered businesses to issue invoices through the system, further into procurement workflows rather than tax filing alone.

Suppliers have also been directed to regularly verify their tax compliance status and keep their records up to date. KRA said it will continue offering sensitisation programmes and technical support through the transition, with queries directed to its contact centre.

New eTIMS rule adds weight to pending court challenge

The integration arrives as KRA's practice of deactivating businesses' eTIMS access over unpaid penalties faces a court challenge. The Consumers Federation of Kenya (COFEK) filed a constitutional petition on 27 August, naming KRA and its Commissioner-General as respondents, arguing that the deactivations can lock out businesses even where all principal tax has been paid or none is owed.

COFEK contends that eTIMS is mandatory for generating compliant tax invoices, creating a contradiction when access is withdrawn as an enforcement measure. The lobby cited a case in which a taxpayer with no outstanding principal tax, only unpaid penalties, was locked out of the system and directed to consult their tax office. It argues that affected businesses are left to either halt operations or trade without compliant invoices, exposing them to fresh penalties for the same non-compliance the deactivation is meant to address.

The petition also raises concerns for customers of affected businesses, who may be unable to obtain compliant invoices for their own tax records despite bearing no responsibility for a supplier's penalties. COFEK is asking the High Court to declare the deactivation practice unlawful and unconstitutional, quash existing decisions made under it, and compel KRA to restore access to affected taxpayers, while noting that restoration would not erase any legitimate penalties owed.

With eTIMS now also a gateway to government payment under the new IFMIS integration, suppliers deactivated under the disputed practice risk losing access to public-sector contracts as well as private trade, pending the outcome of the case. The High Court's ruling on the COFEK petition, and how KRA responds to the new IFMIS validation rules in the meantime, will determine whether the system functions purely as an invoicing tool or also as leverage in tax enforcement.