KRA now blocks payments to tax-dodging State contractors
Business
By
Brian Ngugi
| Sep 02, 2026
The Kenya Revenue Authority (KRA) has completed the integration of its electronic tax invoicing system with the government’s central payment platform.
The move gives the taxman real-time visibility into hundreds of billions of shillings in public procurement transactions and effectively blocks suppliers from receiving state payments without a clean tax record.
The integration between the Electronic Tax Invoice Management System (eTIMS) and the Integrated Financial Management Information System (IFMIS), announced in a joint public notice with the National Treasury on Tuesday, creates an automated checkpoint that ties government payments directly to suppliers’ tax compliance.
Under the new rules, no supplier can process a payment claim through IFMIS without first generating a valid eTIMS invoice that matches their tax records. eTIMS is KRA’s digital platform that requires businesses to issue electronic tax invoices for all taxable supplies, allowing the authority to track sales and value-added tax (VAT) compliance in real time.
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The system offers multiple access options, including an online portal, client software, and system-to-system integration for businesses with automated invoicing systems.
IFMIS is the government’s enterprise resource planning system used across national and county governments to manage budgeting, procurement, financial reporting, and payment processing. It serves as the central nervous system for public financial management, with all government suppliers required to register in the system before conducting business with state entities.
The new integration means that when a supplier submits an invoice for payment through IFMIS, the system automatically validates it against the invoice recorded in eTIMS. Any discrepancy between the two systems flags the transaction and delays or blocks payment processing.
“Suppliers must generate valid eTIMS invoices for all supplies before submission for payment processing through IFMIS,” KRA stated in the notice. “The details of invoices submitted to government entities must correspond precisely with the invoices generated and recorded in eTIMS.”
KRA has cautioned that it will not accept responsibility for payments that are not received, credited, or validated in its accounts.
Government procurement has long been a bedrock of both graft and tax evasion in Kenya. Suppliers have historically been able to submit invoices for payment while maintaining minimal tax footprints, filing nil returns even after earning substantial taxable income from public contracts.
The integration closes a favoured fraud scheme where fictitious supplier invoices are raised against public entities. By replacing manual invoice checks with real-time electronic verification, the platform streamlines financial workflows while closing tax evasion loopholes.
“The integration will promote greater transparency and accountability in government transactions, support efficient and seamless financial processes across Government entities and enhance tax compliance through automated validation of tax invoices,” the joint notice read.
The move comes as KRA faces mounting pressure from President William Ruto’s administration to significantly increase revenue collections. The authority has been pursuing aggressive digital transformation to widen the tax base, with over 1.3 million taxpayers now interacting with simplified digital platforms. Tax evasion by government suppliers has cost the Treasury billions in lost revenue.
The integration of IFMIS with KRA’s systems makes it easier and quicker for the taxman to match supplier payments with tax declarations, catching those who do not pay full taxes on their incomes.
KRA and the National Treasury have committed to supporting suppliers through the transition with sensitisation programmes, technical support, and guidance. Suppliers requiring assistance with eTIMS onboarding or invoice generation can contact KRA through its support channels.