Manufacturers want clear rules, sufficient transition
time and practical solutions before the new eTIMS stock management
system is fully operational.
The concerns
come as Kenya Revenue Authority moves to introduce an additional function requiring businesses to electronically
account for movements of goods through their operations, including purchases,
receipts, sales, transfers, returns, adjustments and disposals.
KRA issued a
public notice on September 7, 2026, requiring taxpayers engaged in business to
maintain accurate and up-to-date stock records through TIMS/eTIMS.
The
authority has since embarked on consultations with businesses and other
stakeholders before implementing the functionality.
The
consultations are expected to address technical and operational challenges,
with manufacturers seeking clarity on how the system will interact with
existing enterprise resource planning (ERP) systems and other government platforms.
Kenya
Association of Manufacturers has particularly raised concerns over the
treatment of different manufacturing processes, acceptable stock variances,
imports and movement of goods between warehouses.
KAM chief
executive Tobias Alando said manufacturers need certainty on the requirements
before the system goes live.
“Over the
years, we have collaborated to sensitise our members on taxation issues and
processes. We are keen to engage our members so that their feedback is heard
and reflected, ensuring the system is well aligned to the realities of
manufacturing by the time it is rolled out.”
He spoke
during a meeting with KRA led by commissioner for micro and small taxpayers George
Obell.
One of the
biggest issues for manufacturers is integration where many large companies
already operate sophisticated ERP systems that track raw materials,
work-in-progress, finished products, sales and warehouse movements.
KAM wants
clarity on how such systems will connect with eTIMS and what variances will be
acceptable where physical stock does not immediately match electronic records.
The
association has also asked KRA to clarify how manufacturing processes involving
conversion of raw materials into finished products will be captured.
This is
significant for factories where a single production process can involve
wastage, by-products, damaged goods, samples and other materials that do not
necessarily result in a conventional sale.
KAM is also
seeking clarity on whether the stock management functionality will be
integrated with the Integrated Customs Management System (iCMS), given
manufacturers’ reliance on imported raw materials and other inputs.
Other issues
include documentation for imports, inter-warehouse transfers, promotional goods
and samples, as well as procedures for explaining legitimate stock variances.
Manufacturers
are also concerned about what happens when the KRA system experiences downtime,
particularly where businesses need to receive or dispatch goods continuously.
Obell said
the stock tracking initiative is intended to tackle missing-trader
transactions, where businesses generate tax invoices without genuine underlying
commercial transactions, reducing their tax liabilities.
The
authority also sees stock tracking as a way of preventing market distortions
and promoting fair competition between compliant and non-compliant businesses.
According to
KRA, the stock management functionality is designed to help taxpayers maintain
their own inventories while improving the accuracy of tax returns and
reporting.
The
authority’s existing eTIMS architecture already contains stock management
functions covering stock inventory, stock by item, imported items, stock-in and
stock-out histories, stock movements and opening and closing stock.
KRA’s
technical documentation also provides for electronic transmission of inventory
movements between branches and the authority’s system.
The
discussions come as manufacturers continue to push for a predictable tax
environment, arguing that frequent changes or unclear implementation
requirements can increase operating costs and complicate investment decisions.
The latest
engagement between KRA and KAM indicates that preparations are being made for a
January 2027 rollout, giving
manufacturers a few months to align their systems, train staff and resolve
outstanding technical questions.
The
transition for businesses will therefore not simply involve issuing electronic
invoices but will require maintaining a consistent digital record of goods from
the point of purchase or import through production, storage, transfer and
eventual sale or disposal.