Effective 7 September 2026, the Kenya Revenue Authority has activated the Stock Management Functionality within the electronic Tax Invoice Management System (eTIMS). This enhancement requires all registered taxpayers using eTIMS to maintain real-time stock records for goods subject to VAT and excise duty. The module integrates with the existing invoicing workflow, enabling automatic deduction of stock quantities upon issuance of electronic tax invoices. The move is designed to curb tax evasion through under-declaration of sales, improve audit trails, and support data-driven risk profiling. Taxpayers were granted a transitional period to configure their systems, with full enforcement commencing on 1 October 2026.
Key Takeaways
- Mandatory Real-Time Stock Tracking: Businesses must record opening stock, purchases, production, and sales transactions in eTIMS. Discrepancies between physical stock and system records may trigger audits and penalties under the Tax Procedures Act.
- Integration with Invoicing and VAT Returns: The stock module feeds directly into the VAT return (VAT 3) preparation, auto-populating cost of goods sold and closing stock values, reducing manual errors and reconciliation efforts.
- Phased Rollout and Support: KRA has provided API specifications for ERP integration, dedicated helpdesk support, and extended onboarding sessions for large taxpayers and eTIMS solution providers to ensure smooth adoption.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement