2026 Tax Updates in Kenya: New Tax Rules & KRA Changes

Q: Do all businesses need eTIMS in Kenya?

Yes. Persons carrying on business in Kenya are generally required to onboard eTIMS and issue electronic tax invoices, including businesses that are not VAT registered, subject to applicable rules and exclusions. eTIMS compliance can also affect your ability to obtain a Tax Compliance Certificate.

Q: Can I qualify for the 2026 Tax Amnesty if I have not filed my returns?

Not immediately. If you have unfiled returns, you first need to file them and clear any outstanding principal tax. Once the principal tax is paid, you may qualify for the 2026 Tax Amnesty and have eligible penalties, interest and fines waived, subject to the applicable requirements.

2026 Tax Updates in Kenya: 5 Key Tax Changes You Should Know

August 13, 2026

Estimated read time: 3 minutes

If you run a business, work as a sole proprietor, earn income outside employment, or simply want to understand your tax obligations, there are several 2026 tax updates in Kenya that you should know about.

The 2026 Tax Updates in Kenya are particularly important because the Finance Act 2026 has introduced changes affecting tax filing deadlines, eTIMS, Tax Compliance Certificates, and tax debts.

There is also a 2026 Tax Amnesty that can help you clear qualifying penalties, interest, and fines relating to tax debts up to 31 December 2025.

In this guide, Quartet Consulting explains the most important 2026 tax updates in Kenya in simple terms and what they mean for you.

So, Let’s get started!!

Table of Contents

2026 Tax Updates in Kenya: What has Changed?
Individual Tax Filing Deadline: What Has Changed?
eTIMS Compliance Is Becoming More Important for Businesses
Reverse Invoicing When Your Supplier Does Not Issue an eTIMS Invoice
eTIMS Compliance and Tax Compliance Certificates (TCC)
2026 Tax Amnesty: How to Clear Old Tax Debts
What Should You Do About the 2026 Tax Updates in Kenya?
Recommended Articles
Frequently Asked Questions About the 2026 Tax Updates in Kenya
Need Help With the 2026 Tax Updates in Kenya?
Conclusion
Disclaimer

2026 Tax Updates in Kenya: What Has Changed?

The Finance Act 2026 introduced several changes to Kenya’s tax administration framework.

For you as a taxpayer, some of the most important changes relate to:

Your annual income tax filing deadline.
eTIMS compliance.
Reverse invoicing and buyer-initiated invoicing.
Tax Compliance Certificates.
Tax debts and the 2026 Tax Amnesty.
How KRA can use electronic records to verify your tax position.

The key point is simple:

Your tax records, invoices, returns, and payments need to tell the same story.

Let’s look at the five tax updates you should know.

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1. The Individual Tax Filing Deadline Is Moving to 30 April

One of the important changes under the Finance Act 2026 is the change to the annual income tax return filing deadline for individuals.

Previously, individuals generally had until 30 June of the following year to file their annual income tax returns.

From the 2026 year of income, the deadline will move to 30 April of the following year.

This means that your 2026 individual income tax return will be due by 30 April 2027.

The new deadline applies to individuals who are chargeable to tax, including people who earn income from sources such as:

Employment
Freelance work.
Consultancy
Sole proprietorships.
Other business activities.
Other taxable sources of income.

The change is particularly important if you are a sole proprietor, freelancer or self-employed individual because you will need to have your income and expense records ready earlier in the year.

What If You Have No Income to Report?

If you have a KRA PIN but did not earn any income during the relevant year, you may still be required to file an annual nil income tax return.

For individuals filing a nil return, the deadline is also changing. From the 2026 year of income, nil returns will be due by 31 January of the following year.

Therefore, if you had no income to report for 2026, you should file your 2026 nil return by 31 January 2027, rather than waiting until 30 April 2027.

This distinction is important because the filing deadline depends on whether you have income to declare:

Individuals with taxable income: File by 30 April of the following year.
Individuals with no income to report (nil filers): File by 31 January of the following year.

What About Companies?

There is no change to the income tax filing deadline for companies.

Companies will continue to file their annual income tax returns within six months after the end of their accounting period.

For example, if a company’s accounting period ends on 31 December, its annual income tax return will remain due by 30 June of the following year.

Therefore, the new 30 April deadline applies to individuals and should not be confused with the existing filing deadline for companies.

2026 Tax Filing Deadline Summary

Taxpayer / Return Category	Previous Deadline	New Deadline	First Applicable Year
Individuals with income	30 June	30 April	2026 year of income
Individuals filing nil returns	30 June	31 January	2026 year of income
Companies	Generally within 6 months after accounting period	No change – 30th June	N/A

2. eTIMS Is Becoming More Important for Your Business

If you run a business in Kenya, eTIMS is no longer something you can afford to overlook.

The Electronic Tax Invoice Management System (eTIMS) is operated by KRA and is used to issue, transmit and manage electronic tax invoices.

KRA requires persons carrying on business to onboard eTIMS and issue electronic tax invoices, whether or not the business is registered for VAT.

This requirement can apply to:

Companies
Sole proprietors
Partnerships
Individuals carrying on business
Businesses operating in the informal sector
Businesses that are not registered for VAT

What Does This Mean for Your Business?

If you are carrying on a business, you should ensure that your sales, purchases and business expenses are properly recorded and supported by the applicable eTIMS documentation.

KRA provides different eTIMS solutions depending on the nature and size of your business, including:

eTIMS Online Portal
eTIMS Client
eTIMS Lite
eTIMS mobile solutions
System-to-System Integration
Buyer-Initiated Invoicing
Reverse Invoicing

The appropriate solution will depend on how your business operates and the volume and nature of your transactions.

Want to learn more?

Read our guide on eTIMS in Kenya to understand who needs to register, how the system works, and how to stay compliant with KRA requirements.

What About Business Expenses Without eTIMS Invoices?

This is where the change becomes particularly important.

For the 2025 year of income, KRA allowed taxpayers, subject to the applicable requirements, to declare certain valid business expenses even where the expenses were not supported by eTIMS/TIMS invoices.

However, from the 2026 year of income, the rules are becoming stricter. Business income and expenses declared in your tax returns are generally expected to be supported by valid electronic tax invoices generated and transmitted through eTIMS/TIMS, subject to applicable exclusions.

This means you should not wait until the end of the year to review your eTIMS records.

Instead, make sure that your invoicing, purchasing and accounting processes are properly set up from the beginning of the year.

What Should Your Business Do?

If you operate a business, it is important to:

Ensure your business is onboarded onto the appropriate eTIMS solution.
Issue eTIMS-compliant invoices for your sales.
Request and retain valid eTIMS invoices for business purchases and expenses.
Regularly reconcile your eTIMS records with your accounting records.
Address missing or incorrect invoices as they arise rather than waiting until tax filing season.

The Key Takeaway:

eTIMS is no longer simply an invoicing requirement.
It is increasingly becoming an important part of how KRA verifies the income and expenses reported in your tax returns.

3. Reverse Invoicing Can Help When Your Supplier Does Not Issue an eTIMS Invoice

Kenya has a large informal and small-scale business sector.

You may, for example,

Purchase goods from a small trader in Eastleigh, a mama mboga in Githurai, a farmer, or another small supplier who may not have set up ETIMS or even have a KRA PIN.

So, what happens when your business purchases goods or services from a supplier who does not issue an eTIMS invoice?

This is where Reverse Invoicing, also known as Buyer-Initiated Invoicing (BII), can be useful.

What Is Reverse Invoicing?

In simple terms, Reverse Invoicing allows an eligible buyer to generate an electronic tax invoice on behalf of a seller, subject to KRA’s requirements.

For example, your business may purchase agricultural produce from a small-scale farmer who does not have an invoicing system.

Where the transaction qualifies, you as the buyer may use the applicable KRA Buyer-Initiated Invoicing solution to generate the Etims invoice.

However, reverse invoicing is not simply a workaround for missing eTIMS invoices.

Businesses must meet the applicable KRA eligibility, approval and system requirements before using the arrangement.

Why Does Reverse Invoicing Matter?

For businesses that regularly purchase from small or informal suppliers, these arrangements can help to:

If you operate a business, it is important to:

Properly document purchases.
Reduce gaps in your eTIMS records.
Maintain more accurate accounting records.
Support reconciliation between purchases, invoices and payments.
Reduce disputes with suppliers.
Strengthen your overall eTIMS compliance.

What Should Your Business Do?

If you regularly purchase from small-scale farmers, informal traders or other suppliers who cannot issue standard eTIMS invoices, do not simply create an invoice yourself without confirming that the transaction qualifies.

Instead, determine whether the Reverse/Buyer-Initiated Invoicing framework applies to your business and ensure you meet the relevant KRA requirements.

The key takeaway:

A supplier’s inability to issue an eTIMS invoice does not necessarily mean the purchase cannot be properly documented. However, the correct eTIMS process must be followed.

Want to learn more? Read our simple guide on “Reverse Invoicing in Kenya” to understand how the process works and the applicable requirements.

4. You Need eTIMS Compliance to Get a Tax Compliance Certificate

A Tax Compliance Certificate (TCC) in Kenya is a document issued by KRA confirming that you as the taxpayer is compliant with your tax obligations.

You may need a Tax Compliance Certificate when:

Applying for certain government tenders.
Applying for certain jobs.
Renewing certain licences or permits.
Applying for a work permit.
Demonstrating your tax compliance status.

A TCC is generally valid for 12 months.

What Has Changed?

You Cannot Get a TCC Without eTIMS Compliance

One important change is that eTIMS compliance is now part of KRA’s TCC requirements for businesses.

If you are a company, sole proprietor, or individual carrying on business in Kenya, you are expected to be onboarded on eTIMS where applicable.

If you are required to use eTIMS but have not onboarded or are not compliant, you may not be able to obtain your Tax Compliance Certificate.

KRA has incorporated eTIMS/TIMS compliance checks into the TCC application process for:

Non-individual entities, such as companies and organisations.
Individuals earning income other than employment income, including sole proprietors and other business owners.

Your TCC application can therefore be affected by your eTIMS status.

What Should Your Business Do?

To avoid problems when applying for a Tax Compliance Certificate in Kenya, make sure you:

Are properly onboarded on eTIMS.
Issue electronic tax invoices where required.
File your tax returns on time.
Pay your taxes on time.
Clear outstanding tax debts or maintain an approved payment plan where applicable.
Remain VAT compliant where VAT applies.

The key takeaway:

If you operate a business in Kenya and are required to use eTIMS, eTIMS compliance is now an important requirement for obtaining your TCC.
Do not wait until you urgently need a Tax Compliance Certificate to address your eTIMS compliance.

5. The 2026 Tax Amnesty Can Help You Clear Old Tax Debts

One of the key opportunities under the 2026 Tax Updates in Kenya is the 2026 Tax Amnesty Programme.

Introduced under the Finance Act 2026, the programme is intended to help taxpayers regularise qualifying historical tax liabilities by providing relief from penalties, interest and fines relating to eligible tax periods up to 31 December 2025.

The amnesty runs from 1 July 2026 to 31 December 2026.

Who Can Benefit from the 2026 Tax Amnesty?

The relief available to you depends on the type of outstanding tax liability you have. You do not necessarily need to make a separate application for every type of relief.

Your tax position	What you need to do	Amnesty treatment
You only have a late filing penalty	Check your KRA account and confirm that the liability qualifies	The qualifying penalty may be waived automatically, so you may not need to make a separate application.
You have penalties and interest, but you have already paid the principal tax	Check your KRA account and confirm that you qualify.	The qualifying penalties and interest may be waived automatically.
You still owe the principal tax	Pay the outstanding principal tax, then apply for the applicable tax amnesty.	Once you meet the requirements, the qualifying penalties, interest and fines may be waived.
You owe principal tax but cannot pay it all at once	Apply for an approved payment plan and make sure the principal tax is fully paid within the required period.	You may qualify for the applicable relief once the requirements are met. The principal tax must generally be fully settled by 31 December 2026.

What If You Have Outstanding Principal Tax?

If you still owe the principal tax, the amnesty does not simply wipe out the entire tax debt.
Generally, you need to settle the outstanding principal tax to qualify for the applicable relief on penalties, interest and fines.
Where you cannot pay the principal amount immediately, you may be able to enter into an approved payment plan.
However, the principal tax must be fully cleared within the required period, including by 31 December 2026 where applicable.

When Does the 2026 Tax Amnesty End?

The 2026 Tax Amnesty ends on 31 December 2026.

If you have outstanding tax issues, do not wait until the last few days of the year. Start by reviewing your KRA account and checking for:

Outstanding principal tax.
Penalties and interest.
Unfiled returns.
Previous tax assessments.
Outstanding tax debts.
Ongoing objections or disputes.

You can then determine what is eligible for automatic waiver, what requires payment, and whether you need to apply for the applicable amnesty.

The key takeaway:

The 2026 Tax Amnesty provides an opportunity to clean up qualifying historical tax liabilities.
If you have old KRA penalties, interest or outstanding tax debts, review your account before 31 December 2026 rather than allowing the opportunity to pass.

What Should You Do About the 2026 Tax Updates in Kenya?

The 2026 Tax Updates in Kenya do not need to be overwhelming. Use the checklist below to make sure your tax affairs are in order.

What To Check	What you should do
*Tax filing deadlines*	Check when your returns are due. If you are an individual, note the new 30 April deadline* from the 2026 year of income.*
*eTIMS compliance*	If you are in business, make sure you are properly onboarded on eTIMS* and using the right solution for your business.*
Business expenses	Keep your eTIMS invoices and supporting documents* throughout the year instead of waiting until tax filing time.*
VAT and eTIMS records	If you are VAT registered, regularly reconcile your VAT, eTIMS and accounting records.
KRA tax ledger	Check your KRA account for unfiled returns, outstanding tax, penalties, interest, assessments and payment mismatches.
2026 Tax Amnesty	If you have old tax debts relating to periods up to 31 December 2025, check whether you qualify for the 2026 Tax Amnesty before the 31 December 2026 deadline.

FAQs on the 2026 Tax Updates in Kenya

1. What is the new individual tax filing deadline in Kenya?

From the 2026 year of income, the annual income tax filing deadline for individuals will move from 30 June to 30 April.
Therefore, your 2026 individual income tax return will generally be due by 30 April 2027.
The deadline for companies remains generally six months after the end of their accounting period.

2. Do all businesses need eTIMS in Kenya?

Persons carrying on business in Kenya are generally required to onboard eTIMS and issue electronic tax invoices, including businesses that are not VAT registered, subject to applicable rules and exclusions.
eTIMS compliance can also affect your ability to obtain a Tax Compliance Certificate.

3. What is the 2026 Tax Amnesty in Kenya?

The 2026 Tax Amnesty in Kenya provides relief on qualifying penalties, interest and fines relating to eligible tax liabilities for periods up to 31 December 2025.
The programme runs until 31 December 2026.
If you have outstanding principal tax, you generally need to settle it or enter into an approved payment arrangement and meet the applicable requirements to benefit from the amnesty.

4. Can I qualify for the 2026 Tax Amnesty if I have not filed my returns?

Not immediately. If you have unfiled returns, you first need to file them and clear any outstanding principal tax.
Once the principal tax is paid, you may qualify for the 2026 Tax Amnesty and have eligible penalties, interest and fines waived, subject to the applicable requirements.

Need Help Understanding the 2026 Tax Updates in Kenya?

Keeping up with the 2026 tax updates in Kenya can be challenging, especially when you are managing your business while also dealing with KRA returns, eTIMS, VAT and tax compliance.

At Quartet Consulting, we can help you understand your tax obligations and keep your business compliant.

We can assist you with:

KRA tax compliance
eTIMS registration and implementation
Tax return preparation and filing
VAT compliance and reconciliation
2026 Tax Amnesty reviews
Tax Compliance Certificates (TCCs)
Tax advisory
Tax health checks and compliance reviews

If you are unsure about your tax position, it is better to review it now rather than wait for a KRA notice.

Need help with your tax compliance? Contact Quartet Consulting to book a free consultation with our tax advisors.

Conclusion

The 2026 Tax Updates in Kenya are not only about changes to tax rates. They also affect how you file your returns, issue invoices, maintain records and stay compliant with KRA.

Some of the key changes include the

30 April individual filing deadline from the 2026 year of income,
greater focus on eTIMS compliance,
enhanced Tax Compliance Certificate (TCC) requirements, and
the 2026 Tax Amnesty for qualifying historical tax liabilities.

If you run a business, make sure your eTIMS, invoices, accounting records, VAT returns and tax filings are properly maintained and reconciled throughout the year.

If you have outstanding tax liabilities relating to periods up to 31 December 2025, review your position and determine whether you can benefit from the 2026 Tax Amnesty before 31 December 2026.

The best time to address your tax compliance is before KRA comes looking for you.

Book a Free Consultation with us today!

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Disclaimer

This article is provided for general informational purposes only and should not be considered legal or tax advice.

Tax obligations depend on your individual circumstances, and tax laws and administrative requirements may change.

You should consult a qualified tax professional such as Quartet Consulting or confirm your tax position directly with the Kenya Revenue Authority (KRA) before making any tax-related decisions.

Sources