What exemption from eTIMS actually means
Many owners hope they are exempt from eTIMS, but the reality is that the requirement is broad. The common misunderstanding is that being below the VAT threshold means exemption. It does not: a non-VAT business issues non-VAT eTIMS invoices to record income, rather than escaping the system entirely.
KRA has indicated certain limited categories and transaction types that fall outside the standard eTIMS invoicing requirement, and the position has evolved as the rollout has progressed. Because these categories are specific and change, you should not assume you fall into one. Confirm your exact obligation with KRA or your tax adviser rather than relying on a general list.
Get this right and it runs quietly in the background of your business. Get it wrong and you risk rejected invoices, disallowed expenses for your customers, and exposure during a KRA review under the Tax Procedures Act. Confirm the current rules and any penalty amounts with KRA, as they change.
Compliance is not extra admin if the system does it for you on every transaction.
How to check your eTIMS obligation
A practical path for a Kenyan business. Work through it in order.
- 1
Confirm your registration status
Check whether you are VAT-registered or below the threshold. Both generally issue eTIMS invoices, but the invoice type differs.
- 2
Identify your income types
List how your business earns: sales of goods, services, exempt supplies, or income types KRA may treat differently. This shapes what you must record.
- 3
Confirm with KRA, not a forum
Exemption categories are specific and change. Confirm your exact position with KRA or a tax adviser rather than assuming from general advice.
- 4
Set up compliant invoicing for what is in scope
For everything in scope, use a compliant system that issues the right invoice (VAT or non-VAT) automatically.
- 5
Keep reconciled records
Reconcile what you issue and receive as you go, so any reporting and filing summarise records you already hold rather than a month-end reconstruction. KRA can review records going back several years.
- 6
Confirm the current rules with KRA
Rates, thresholds, exemptions and deadlines change. Before relying on a specific figure, confirm the current position at kra.go.ke or with your tax adviser.
Common mistakes to avoid
Assuming below-threshold means exempt
It does not. A non-VAT business issues non-VAT eTIMS invoices. Exemption from VAT is not exemption from eTIMS.
Relying on hearsay about exemptions
Exemption categories are specific and change. Confirm your status with KRA rather than a WhatsApp group.
Ignoring partial scope
Even if some income is treated differently, the rest is usually in scope. Record what is in scope compliantly.
Waiting for a deadline before getting compliant
Every uncompliant transaction is a gap you have to explain later. Getting compliant now is cheaper than catching up under pressure.
Relying on a system that cannot work offline
Connectivity is not guaranteed everywhere in Kenya. Use a system that records offline and transmits to KRA when the connection returns, so you never fall out of compliance during an outage.
A consultant checks the rules
A solo consultant in Nairobi assumed that, earning below the VAT threshold, she was exempt from eTIMS. When a corporate client asked for a compliant invoice to claim her fee, she discovered that non-VAT businesses still issue non-VAT eTIMS invoices to record income.
She confirmed her position with a tax adviser and set up a compliant system. Her invoices now record her income compliantly and her corporate clients can claim her fees.
She was not exempt after all, and finding out from a client rather than KRA could have cost her the work. Confirming early made the fix simple.
Trading without eTIMS-compliant tax invoices risks KRA penalties, blocked VAT input claims for your customers, and receipts a business buyer cannot expense.
Veira signs every sale to KRA eTIMS automatically, so each receipt is compliant the moment it prints, with no separate device to reconcile.
How Veira handles this for you
Veira is built for Kenyan businesses. It issues compliant KRA eTIMS invoices automatically on every sale, applies the right tax treatment per item, captures the buyer KRA PIN for business customers, keeps your records reconciled and ready for filing, and reconciles M-Pesa and Pochi payments to each sale.
It runs on a free handheld terminal or the phone you already own, keeps working offline, and runs from KES 2,999 a month with a free terminal and a 30-day money-back guarantee. See how Veira works, or book a free demo.
Frequently asked questions
Are small businesses exempt from eTIMS?
Is a non-VAT business exempt from eTIMS?
What categories has KRA indicated as outside eTIMS?
How do I confirm whether I am exempt?
If part of my income is exempt, what about the rest?
Does Veira handle this automatically?
How much does eTIMS-compliant software cost?
who is exempt from eTIMS comes down to recording the right thing, the right way, through a compliant system, and Veira does exactly that without extra work. See how Veira works, or book a free demo. Always confirm current KRA rules and rates at kra.go.ke, as they can change.