KRA to Begin Automatic Verification of Income and Expenses in Tax Returns from January 2026

Kenya, 8 November 2025 - The Kenya Revenue Authority (KRA) has unveiled plans to start verifying income and expense details declared in tax returns beginning January 1, 2026, in a move meant to enhance transparency and accuracy in tax compliance.

The exercise will cover returns for the 2025 year of income and will apply to both individuals and businesses.

In a public notice released on 7 November 2025, the Authority said the initiative will mark a shift toward a more data-driven validation process.

According to KRA, the system will “check and confirm income and expense information provided in tax returns” to ensure that all declared figures match official records.

KRA explained that the verification will be done by cross-referencing information submitted by taxpayers with data from three main sources:

• TIMS/eTIMS electronic invoices
• Withholding income tax statements
• Import data captured in customs systems

The Authority emphasised that only income and expenses supported by valid electronic tax invoices will be accepted. These invoices must be correctly transmitted through eTIMS and include the buyer’s PIN where applicable.

The new requirement is anchored in Section 23A of the Tax Procedures Act (Cap 469B) and the Tax Procedures (Electronic Tax Invoice) Regulations, 2024, though some exemptions will remain in force for specific cases.

To ensure a smooth transition, KRA has urged taxpayers to obtain TIMS/eTIMS statements from their respective account managers and reconcile them with their internal books of accounts.

The Authority said early reconciliation will help minimise mismatches during the validation process and reduce the likelihood of rejected returns or additional reviews.

KRA has also invited feedback from taxpayers and other stakeholders to help streamline the implementation of the new system before the 2026 rollout.

The tax agency reminded the public that it will not be liable for payments that are not properly received, credited, or reflected in its systems.

It urged taxpayers to double-check that all payments and returns are complete, accurate, and verifiable.

The validation framework is part of KRA’s broader modernisation drive, which aims to strengthen compliance, curb revenue leakages, and improve transparency within Kenya’s tax administration.