- KRA to Match Taxpayer Declarations With Digital Records Under New Compliance Drive
Kenya to Tighten Validation of Income Tax. Kenya’s tax administration landscape is set for a major shift as the Kenya Revenue Authority (KRA) moves to introduce stricter verification measures for income tax filings starting January 1, 2026.
The agency confirmed that it will begin automatically validating income and expense declarations submitted by both individual taxpayers and non-individual entities against multiple third-party and government data sources.
This new verification framework will apply to tax returns filed for the 2025 year of income through the iTax system.
KRA to Cross-Check Returns with Digital Data Sources
According to the authority, every tax return submitted from 2026 will be matched against three primary data systems:
- TIMS/eTIMS electronic invoicing records
- Withholding tax declarations submitted by payers
- Customs import data captured by border and port systems
The move marks one of the most significant expansions of Kenya’s tax data integration in recent years.
KRA explained that the objective is to ensure consistency between what taxpayers declare and what is recorded across the national tax infrastructure, particularly in the digital invoicing environment.
Electronic Tax Invoices Now Mandatory for Expense Claims
The authority reiterated that all income and expense entries must be backed by valid electronic tax invoices, except where exemptions exist under Section 23A of the Tax Procedures Act or the 2024 Electronic Tax Invoice Regulations.
For businesses, this means that expenses will only be allowed where the supplier issued an eTIMS-compliant invoice transmitted with the correct buyer’s PIN.
KRA stated:
“All declared income and expenses must be supported by a valid electronic tax invoice, correctly transmitted with the buyer’s PIN, where applicable.”
This requirement aligns with Kenya’s ongoing campaign to eliminate manual invoicing and expand visibility across value chains.
See Also: South Africa Maintains Medical Tax Credits as Treasury Denies Plans to Scrap Relief
Taxpayers Advised to Review Their Digital Records Early
To ease the transition, KRA is encouraging taxpayers to obtain their annual TIMS/eTIMS schedules from assigned account managers.
These schedules detail:
- Income captured during the tax year
- Expenses recorded via suppliers’ electronic invoices
Businesses are being asked to reconcile discrepancies early, ahead of filing their 2025 returns in 2026.
Part of Kenya’s Wider Tax Modernisation Agenda
Kenya has been accelerating tax digitisation since the enforcement of eTIMS in 2024. The system was introduced to:
- Curb fraudulent invoices
- Reduce revenue leakages
- Improve audit efficiency
- Expand taxable visibility within the informal sector
The new validation process represents the next phase of the country’s efforts to create a fully data-driven tax compliance ecosystem, similar to models used in Rwanda, South Africa, and parts of the European Union.
Tax experts anticipate that the measure will significantly reduce under-declaration but may also raise compliance costs for small businesses not yet fully integrated into Kenya’s digital invoicing environment.
