KRA turns to digital tools to boost tax collection

By Daisy Okiring

Nairobi | Thursday, June 19, 2025– The Kenya Revenue Authority (KRA) is upgrading its electronic Tax Invoice Management System (eTIMS) in a renewed effort to boost Value Added Tax (VAT) revenue and clamp down on tax fraud.

Speaking at the African Development Bank’s VAT Digitization Seminar in Nairobi, Commissioner for Medium and Small Taxpayers George Obell said the enhanced eTIMS platform is already delivering results by sealing loopholes, improving VAT compliance, and increasing revenue.

“The VAT system in Kenya is undergoing a revolution,” Obell said. “VAT should be the most reliable and highest-yielding tax head. When the system is abused, both government and citizens lose.”

The revamped eTIMS allows real-time transaction monitoring, automatic rejection of false claims, and instant detection of fictitious invoices. These features have helped KRA flag and reject unsupported deductions that previously went unnoticed.

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In May 2025, VAT collections reached Ksh32.14 billion — a 16% increase from the same month last year. KRA now targets Ksh2.704 trillion by the end of the 2024/2025 financial year.

The tax authority is also developing a tiered eTIMS approach to make compliance easier for all business sizes. Small traders and informal businesses can now access simplified platforms, including mobile-friendly options like USSD codes.

“You can’t have a one-size-fits-all system,” said Obell. “We’re designing flexible, user-friendly solutions to match the realities of different businesses.”

Obell added that the eTIMS upgrades have increased transparency and helped uncover structural gaps in the VAT system, which are now informing broader tax policy reviews.

By tightening controls and modernizing its systems, KRA hopes to bring more Kenyans into the tax net, grow VAT revenue, and eliminate fraud risks.