Baruch & Kirisia Consultants

𝐓h𝐞 𝐞𝐓𝐈𝐌𝐒 𝐌𝐢𝐫𝐚𝐠𝐞: 𝐖𝐡𝐲 𝐊𝐑𝐀’𝐬 𝐍𝐞𝐰 𝐄𝐱𝐩𝐞𝐧𝐬𝐞 𝐑𝐮𝐥𝐞𝐬 𝐅𝐚𝐜𝐞 𝐚𝐧 𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐥 𝐖𝐚𝐥𝐥

As of January 1, 2026, the Kenya Revenue Authority (KRA) transitioned from "trust-based" filing to "validation-based" filing. For the current tax cycle ending June 30, 2026, individual taxpayers are no longer just reporting numbers; they are reconciling a digital ledger that KRA has already pre-populated.

Under the new Section 23A of the Tax Procedures Act, any business expense not captured via the Electronic Tax Invoice Management System (eTIMS) is, by default, non-deductible. While this looks seamless on a whiteboard in Upper Hill, it is crumbling in the streets of Grogon and the stalls of Muthurwa.

𝟏. 𝐓𝐡𝐞 𝐃𝐞𝐚𝐭𝐡 𝐨𝐟 𝐭𝐡𝐞 "𝐇𝐨𝐧𝐨𝐫𝐚𝐛𝐥𝐞" 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧
In the past, if you ran a small consultancy and spent KSh 50,000 on office repairs using a local fundi, you simply listed "Maintenance" in yoThe "ur iTax return. KRA rarely asked for a receipt unless you were audited.

Today, the iTax-eTIMS integration means the "Maintenance" field in your return is cross-referenced with KRA’s backend. If there is no eTIMS invoice from your mechanic or fundi linked to your PIN, the system triggers an "Invalid Expense" flag. You are essentially taxed on your gross turnover, as your legitimate costs are legally invisible.

𝟐. 𝐓𝐡𝐞 𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐥 𝐒𝐞𝐜𝐭𝐨𝐫 𝐏𝐚𝐫𝐚𝐝𝐨𝐱
Kenya’s economy is 80% informal. The rules assume a level of digital literacy and formalization that doesn't exist at the grassroots.

>𝐌𝐚𝐦𝐚 𝐌𝐛𝐨𝐠𝐚" 𝐄𝐱𝐚𝐦𝐩𝐥𝐞: An individual running a small catering business buys vegetables worth KSh 10,000 weekly from a local vendor. The vendor doesn't have a smartphone, let alone eTIMS Lite. To claim this expense, the caterer must now use "Buyer-Initiated Invoicing"; essentially doing the vendor's taxes for them. Most small players simply won't do this, leading to over-taxation of the formalizing middle class.
>𝐓𝐡𝐞 𝐆𝐫𝐨𝐠𝐨𝐧 𝐌𝐞𝐜𝐡𝐚𝐧𝐢𝐜: If your delivery van breaks down in Grogon, the mechanic wants cash or M-Pesa. He isn't going to dial `*222 #` to generate an eTIMS invoice for a KSh 5,000 alternator fix. By June 30th, that KSh 5,000 is a "ghost expense"—real in your pocket, but fake to the KRA.

𝟑. 𝐒𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐚𝐥 𝐅𝐚𝐢𝐥𝐮𝐫𝐞𝐬 𝐨𝐟 𝐭𝐡𝐞 𝟐𝟎𝟐𝟔 𝐑𝐮𝐥𝐞𝐬
The primary failure of these rules lies in the shifting of the administrative burden. KRA has turned every individual taxpayer into a "Tax Enforcement Officer."

𝟒. 𝐓𝐡𝐞 "𝐍𝐢𝐥 𝐅𝐢𝐥𝐞𝐫" 𝐓𝐫𝐚𝐩
KRA’s latest AI-driven crackdown has flagged over 392,000 nil filers in 2026. The system now uses third-party data—M-Pesa statements, bank records, and electricity bills to prove you had "economic activity."

If you try to file a Nil return but the system sees you paid a formal school (which issued an eTIMS invoice for fees), it asks: "Where did this money come from?" If you claim it came from your informal business, but that business has no eTIMS sales records, you are caught in a compliance pincer movement.

𝐓𝐡𝐞 𝐄𝐱𝐩𝐞𝐫𝐭'𝐬 𝐕𝐞𝐫𝐝𝐢𝐜𝐭:
> The 2026 filing rules are technologically brilliant but sociologically blind. By making the "Mama Mbogas" and "Grogon Mechanics" the gatekeepers of business deductions, the KRA has created a system where the small entrepreneur is punished for the informality of their suppliers. Until the cost of compliance is lower than the cost of evasion, the June 30th deadline will remain a season of "creative accounting" rather than true transparency.

𝘈𝘴 𝘺𝘰𝘶 𝘱𝘳𝘦𝘱𝘢𝘳𝘦 𝘺𝘰𝘶𝘳 𝘧𝘪𝘭𝘪𝘯𝘨, 𝘩𝘢𝘷𝘦 𝘺𝘰𝘶 𝘢𝘵𝘵𝘦𝘮𝘱𝘵𝘦𝘥 𝘵𝘰 𝘶𝘴𝘦 𝘵𝘩𝘦 "𝘉𝘶𝘺𝘦𝘳-𝘐𝘯𝘪𝘵𝘪𝘢𝘵𝘦𝘥 𝘐𝘯𝘷𝘰𝘪𝘤𝘪𝘯𝘨" 𝘧𝘦𝘢𝘵𝘶𝘳𝘦 𝘰𝘯 𝘦𝘛𝘐𝘔𝘚 𝘧𝘰𝘳 𝘺𝘰𝘶𝘳 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘭 𝘴𝘶𝘱𝘱𝘭𝘪𝘦𝘳𝘴 𝘺𝘦𝘵?

CPA Charles Gatere
Financial Advisor

Nikikumbuka AFM natokwa na wazimu😅😅

This is the message I am getting upon uploading a return for a consultant.The consultant being a small fish doesn't have etims receipts for the expenses.How will someone using a Matatu obtain etims receipt for traveling?
Unless this thing is implemented in phases, I don't see businesses filing income tax returns for 2025 . Actually even big businesses weren't 100% compliant . The government itself didn't comply at all. For those who paid licences to the national government or to county government, did you receive an etims invoice?

Businesses will do their income tax computations and pay the final tax without filing.

In simple terms is that interest rates can differ from one customer to another based on one's borrowing and repayment behavior. In this regard, positive repayment history lowers your risk category.

Did you know that onboarding on etims;

Facilitates simplified return filing ✅

Enhances bookkeeping capabilities for all businesses regardless of size.✅

Eliminates the risk of loss of physical invoices.✅

Tune in to NTV's today from 7.30pm as we discuss all this and more.

To find out your tax station,
dial *572 #> select 1. Enquiry>select 1: Domestic taxes services>select 4: tax station enquiry>...

The old rates.
The new rates were freezed by the supreme court and threw back the case to be heard afresh by the lower courts

ON KENYAN DEBT STATUS AND KENYA KWANZA NONSENSICAL DEFENCE🤦🤦
Zakayo is stealing from Peter to pay Paul 🤔

Did Uhuru not pay loans left by his predecessors, or did Kenya start taking loans under Uhuru regime?kenya kwanza wanatubeba
Ufala sana.government is continuous,transient.in 60 years Kenya has
been borrowing and repaying.
This government is clueless on economic policy .The Government to Government deal on oil has come to haunt it despite prior warnings . Simply saying this government does not heed to sober practical solutions. The ostrich's head is deep in the sand .
Corruption is rife and competing with the revenue collection.
Controller of budget came out clean on Kenya Kwanzas budgeted corruption and instead of fixing things the deep state decided to go after her with unwavering and unmatched irresponsibility and intimidation taking her to court and subsequently with jail blackmails to silence her .
Government is spending billions on unnecessary renovations like statehouse and DPS office .(are they necessary if we are in a crisis🤔 )
Simple Solution:
1.Instead of looting 30% of the budget, the looters can decide to only loot 15%. The other 15% should be reduced from the budget. This should reduce our budget by around 500B. This amount should thus not be generated. This will reduce taxes and/or borrowing hence releasing some cash into the economy to jumpstart economic growth.
2. Retire high interest loans with concessionary loans. Debt restructuring will not help solve the problem. It will simply postpone it to hurt future generations.
3.Reduce expenditure on vehicles and per diems on senior government officials till we are out of the pit and on ground .(why on earth would a Cabinet Minister or a parastatal head need 4-6 gazzlers for chase cars 🤔)what are they chasing ? Perhaps for a share of the loot of the high interest loans coming through but not to help wanjiku or salvage the country .
The country is sick ,very sick 🤦🏽‍♂️
Oliver Kirisia Amagoye (CPA K)

sana.gov