KRA Issues New Stock Records Directive to Businesses Using TIMS, eTIMS

KRA Issues New Stock Records Directive to Businesses Using TIMS, eTIMS

The Kenya Revenue Authority (KRA) has issued a new directive requiring businesses using the Tax Invoice Management System (TIMS) and Electronic Tax Invoice Management System (eTIMS) to maintain accurate and up-to-date stock records.

The tax authority announced the requirement in a public notice issued on Friday, September 4, explaining that businesses will now be expected to account for the movement of goods throughout their operations.

Under the new functionality, taxpayers will be required to record goods as they are purchased or received and update their stock records when items are sold, transferred, returned, adjusted or otherwise disposed of.

KRA said the requirement is intended to improve the accuracy of business records while strengthening compliance with tax laws.

“KRA informs all taxpayers engaged in business that they are required to maintain accurate and up-to-date stock records while using TIMS/eTIMS in accordance with the law.”

The authority further explained that stock records should provide a clear account of goods entering and leaving a business.

“The stock records should accurately account for goods as they move through the business and reflect stock purchased or received, sold, transferred, returned, adjusted or otherwise disposed of in the course of doing business.”

The new functionality is expected to give KRA greater visibility into how goods move through businesses that use the electronic tax invoicing systems.

By linking stock movements with electronic transactions, the authority aims to strengthen tax compliance and improve the accuracy of information submitted through tax returns and other business reports.

For businesses, the directive means stock records will need to remain consistent with transactions captured through TIMS and eTIMS.

This could make accurate record-keeping increasingly important, particularly for businesses that handle large volumes of goods or frequently transfer stock between different locations.

Any significant differences between physical stock and electronic records could attract questions from the tax authority during compliance checks.

The requirement could also present an adjustment for small businesses that have traditionally relied on manual stock books or basic accounting systems.

However, KRA has not indicated a specific enforcement deadline or announced separate penalties specifically targeting businesses that fail to comply with the new stock-record functionality.

The authority is expected to engage businesses and other stakeholders before the functionality is fully implemented.

KRA said consultations with taxpayers and other stakeholders would begin in September to provide more information about how the system will operate.

The consultations are also expected to give businesses an opportunity to raise concerns, identify technical challenges and provide feedback on the proposed system.

The authority has encouraged taxpayers to participate in the engagements as preparations for the rollout continue.

The move is part of KRA’s broader efforts to expand the use of technology in tax administration and improve the tracking of commercial transactions.

TIMS and eTIMS have increasingly become important tools in the authority’s efforts to digitise tax invoicing and improve the visibility of business transactions.

For businesses, the latest directive places greater emphasis on ensuring that stock records, invoices and actual transactions remain properly aligned.

KRA’s consultations will therefore be closely watched by traders and other taxpayers as they seek clarity on the technical requirements and practical implications of the new functionality.

As the rollout progresses, businesses will need to review their existing stock management systems and ensure they can accurately capture purchases, sales, transfers, returns, adjustments and disposals.

The authority said stakeholder engagement would help facilitate implementation while addressing challenges that could disrupt normal business operations.

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KRA Issues New Stock Records Directive to Businesses Using TIMS, eTIMS