eTIMS for agrovets in Kenya

Which inputs are zero-rated or exempt, and which are not

The VAT Act treats a defined list of agricultural inputs favourably. Fertilisers and many planting seeds are zero-rated, which means VAT applies at 0 percent and the invoice shows the item with a zero rate. A range of approved agricultural pest-control products and certain veterinary items are exempt, which is a different status: no VAT is charged and the item is marked exempt, not zero.

Everything else in the shop is usually standard-rated: knapsack sprayers, tools, piping, animal feeds that fall outside the exempt list, packaging, and general consumer goods. Two items that look similar can sit on different rates, so the line is drawn at the product level, not the shelf.

The safe approach is to confirm each SKU once, when you add it to your system, against the current VAT Act schedule and your supplier tax declaration, then let the till apply that rate automatically. An agrovet that bulk-codes everything as standard over-charges farmers VAT on zero-rated fertiliser; one that codes everything as zero under-reports tax on the sprayers. Both produce wrong invoices.

• Zero-rated: fertilisers and listed planting seeds (VAT at 0 percent, shown on the invoice).
• Exempt: a defined list of agricultural pest-control and veterinary products (no VAT, marked exempt).
• Standard-rated (16 percent): tools, sprayers, piping, packaging, and general goods not on the favoured lists.

Selling to farmers on credit

Credit is normal in this trade. A farmer takes inputs at planting and clears the balance after harvest. For eTIMS, the taxable event is the sale, so a compliant invoice issues when the goods leave the shop, with the correct rate per item, even though no money has changed hands yet.

When the farmer pays later, you record the payment against that invoice. You do not issue a second eTIMS invoice for the same goods. If goods come back or a balance is written down, that is handled with a credit note, which adjusts the original invoice rather than creating a new sale.

Keeping the invoice and the payment linked is what keeps your books clean. A common gap is issuing nothing at the point of credit sale and only "invoicing" when paid, which leaves weeks of sales unrecorded and a daily total that never matches stock movement.

The rejection errors that hit agrovets most

The errors an agrovet sees are mostly about tax rate and item codes, because of the mixed zero, exempt and standard stock. The most common is a tax-rate mismatch: an item transmitted with a rate that does not match its registered code, which KRA rejects. The fix is a clean product file, not a per-invoice correction.

The second is an unknown item: a cashier types a freeform line for stock that is not in the product file (common with new-season chemicals), the rate defaults wrongly, and the invoice fails or transmits incorrectly. The third is a buyer PIN failure on credit sales to a registered farm or cooperative, where the PIN is mistyped or missing. Exact error codes differ by integrator, but the cause is almost always one of these three.

Trading through power cuts and dead network

Agrovets are often in market towns and rural centres where power and network drop. eTIMS allows for this: a compliant setup keeps selling offline, signs each invoice locally, and transmits to KRA automatically when the connection returns. You do not stop selling and you do not lose the audit trail.

What you must avoid is reverting to a paper book during the outage and never entering those sales. The sales made offline have to reach KRA once you reconnect, in sequence, or you get a gap that an auditor can see.

What KRA auditors check in an agrovet

Because agrovets mix zero-rated, exempt and standard goods, an auditor looks first at whether the tax rates on transmitted invoices match the products actually sold. A shop that sells mostly fertiliser but reports almost all sales as standard-rated, or the reverse, stands out immediately.

They also look at credit sales: whether invoices were issued at the point of sale or only when farmers paid, and whether stock movements line up with transmitted sales. Under the 2024 regulations (Legal Notice No. 64 of 2024) and the January 2026 enforcement of income and expense validation, an expense a buyer cannot support with a compliant invoice is disallowed, so your farm and cooperative customers increasingly need correct invoices from you. The penalty for issuing a sale without a compliant eTIMS invoice is up to KES 1,000,000 or 10 percent of the tax due, whichever is higher.

Setting up eTIMS in an agrovet in five steps

1. Register on OSCU through a certified integrator. Register through a certified POS integrator so each sale is signed and transmitted automatically. eTIMS Lite on a phone does not cope with a mixed-rate, high-SKU shop.
2. Code every SKU with its correct rate. Mark fertilisers and listed seeds as zero-rated, exempt inputs as exempt, and everything else as standard. Do this once in the product file, confirmed against the VAT Act schedule.
3. Set up a credit-sale workflow. Issue the eTIMS invoice when goods leave the shop, record the farmer payment against it later, and use credit notes for returns or write-downs.
4. Confirm offline mode works. Test a sale with the network off and watch it transmit when you reconnect, so a power cut never stops trade or breaks the audit trail.
5. Reconcile daily. At close, transmitted eTIMS sales should match your till and your stock movement. A gap is a clue that a credit sale was missed or an item was sold off-file.

How Veira handles this

Veira holds the correct tax rate against each SKU, so zero-rated fertiliser, exempt inputs and standard goods each issue a correct eTIMS invoice without the cashier deciding the rate. Credit sales issue an invoice at the point of sale and track the farmer balance until it clears, and the till keeps selling and signing invoices through power and network outages, transmitting to KRA when the connection returns.

Frequently asked questions