The Kenya Revenue Authority (KRA) is implementing significant changes to the income tax return process, announcing that it will begin validating income and expenses for all individual and non-individual returns starting January 1, 2026.
This validation will specifically target the 2025 Year of Income/Accounting Period return submitted via the iTax platform.
KRA’s validation process will cross-reference declared income and expenses against three primary digital data sources:
- TIMS/eTIMS Invoices: Electronic tax invoice data.
- Withholding Income Tax Gross Amounts: Records of withheld income.
- Import Records: Data from customs systems.
They key requirement is that all declared income and expenses must be supported by a valid electronic tax invoice, correctly transmitted with the buyer’s PIN where applicable, subject to exceptions under the Tax Procedures Act.
Taxpayers are encouraged to request their annual TIMS/eTIMS schedules from their designated account managers and provide feedback to KRA regarding this new validation process.
This KRA announcement aligns with the government’s broader strategy to modernize and expand the tax base using technology, including Artificial Intelligence (AI).
President William Ruto’s economic advisor, David Ndii, recently revealed plans to roll out a machine learning model within the next two years to handle tax collection and assessments principally by AI.