Reverse Invoicing on ETIMS in Kenya: Step-by-Step Guide (2026)

Q: Is Reverse Invoicing on ETIMS in Kenya allowed?

Yes. The Kenya Revenue Authority (KRA) allows buyer-initiated invoices. You can legally create a reverse invoice on ETIMS in Kenya even if your supplier has not issued one yet.

Q: Is Reverse Invoicing on ETIMS in Kenya mandatory?

No. Reverse invoicing is not mandatory. However, it is highly recommended to stay compliant, especially when dealing with suppliers not fully registered on ETIMS or when you need to capture expenses accurately for KRA reporting.

Q: What happens if my supplier rejects the invoice?

If your supplier rejects the reverse invoice, check for errors such as item details, quantities, and VAT information. Correct any mistakes and resubmit the invoice through ETIMS.

Q: Can I create a Reverse Invoice on ETIMS if I’m not VAT registered?

Yes. Reverse invoicing works for both VAT-registered and non-VAT businesses. You can generate fully compliant invoices regardless of your VAT status, ensuring your purchases are recognized by KRA.

Q: Does Reverse Invoicing on ETIMS in Kenya cost anything?

No. Generating a buyer-initiated invoice on ETIMS is completely free for all businesses.

Creating an Invoice using ETIMS in Kenya – Simple Guide

March 18, 2026

Estimated read time: 2 minutes

If you run a business in Kenya, you’re probably used to issuing invoices yourself.

But what happens when your buyer creates the invoice instead of you?

Or even more common – what happens when your supplier is not on ETIMS?

That’s exactly where Reverse Invoicing on ETIMS in Kenya comes in.

With the introduction of eTIMS by the Kenya Revenue Authority (KRA), you can now create buyer-initiated invoices to stay compliant, even when your supplier isn’t fully set up.

Don’t worry – this guide by Quartet Consulting walks you through Reverse Invoicing on ETIMS in Kenya in the simplest, most practical way.

Let’s dive right in!!

Table of Contents

What is Reverse Invoicing?
Is Reverse Invoicing the Same as Buyer-Initiated Invoicing?
When Should You Use Reverse Invoicing on ETIMS in Kenya?
Common scenarios when Reverse Invoicing is used in Kenya
Key Features of Reverse Invoicing
Key Requirements for Reverse Invoicing on ETIMS in Kenya
Why Reverse Invoicing Matters in 2026
Step-by-Step: How to Do Reverse Invoicing on ETIMS in Kenya
Recommended Articles
FAQs About Reverse Invoicing on ETIMS in Kenya
Conclusion

What is Reverse Invoicing?

Reverse Invoicing on ETIMS in Kenya is a process where you (the buyer) create an invoice on behalf of your supplier (the seller).

Instead of waiting for your supplier to issue an invoice, you:

Prepare the invoice yourself
Submit it through ETIMS
Wait for the supplier to approve it

Once approved, it becomes a valid tax invoice recognized by KRA.

Think of it as:
“I’ve bought from you – so I’ll generate the invoice, and you just confirm it.”

Struggling to generate your first invoice using ETIMS in Kenya?

Quartet Consulting can guide your business step by step, making invoice creation fast, simple, and fully compliant with KRA regulations.

Book Your Free Consultation with Quartet Consulting Today WhatsApp

Is Reverse Invoicing the Same as a Buyer-Initiated Invoice?

Yes – Reverse Invoicing on ETIMS in Kenya is the same as buyer-initiated invoicing in Kenya.

In both cases:

You (the buyer) generate the invoice
Your supplier approves or rejects it

On ETIMS, you’ll often see this labeled as “Buyer-Initiated Invoice.”

When Should You Use Reverse Invoicing on ETIMS in Kenya?

You should use Reverse Invoicing on ETIMS in Kenya when:

Your supplier delays issuing invoices
You have frequent or recurring purchases with your supplier
You want faster bookkeeping and tax compliance
You need real-time transaction records
Your supplier is not on ETIMS (e.g., informal traders like Mama Mboga)

Common scenarios when Reverse Invoicing is used in Kenya:

You’ll find yourself using Reverse Invoicing on ETIMS in Kenya when:

You’re buying within a supply chain – especially where goods move across multiple suppliers and you need proper documentation at every stage
You’re making wholesale purchases – and want to quickly capture large or frequent transactions without waiting for invoices
You’re paying for services – like consultants, freelancers, or technicians who may delay issuing invoices
You’re dealing with informal traders – such as Mama Mboga or small suppliers who may not be fully set up on eTIMS

Key Features of Reverse Invoicing on ETIMS in Kenya

Here’s what happens when you use Reverse Invoicing on ETIMS in Kenya:

1. You Create the Invoice

As the buyer, you take the first step. You’ll need to enter:

Supplier details – their KRA PIN and name
Items purchased – what you bought, quantity, and price
VAT status – indicate whether the items attract VAT
Payment method – M-PESA, cash, bank transfer, or other

This gives you control over your expense records and ensures everything is ready for KRA compliance.

2. Your Supplier Approves or Rejects

Once you’ve created the invoice, your supplier will:

Review the invoice – check that the details are correct
Approve it – once approved, the invoice becomes valid and recognized by KRA
Or reject it – if there’s an error, they can reject it so you can make corrections

Tip:

Always double-check item details and VAT status before sending – this reduces the chances of rejection and speeds up the process

Key Requirements for Reverse Invoicing on ETIMS in Kenya

Before you start, make sure you have:

Your supplier’s KRA PIN
Accurate transaction details (items, quantity, amount, VAT status)
Access to eCitizen
Your KRA login credentials (i.e KRA PIN and Password)

Quick tip:

If you don’t have internet access, you can still initiate Reverse Invoicing on ETIMS in Kenya using USSD (*222# → KRA services → Buyer Initiated Invoice).

Why Reverse Invoicing on ETIMS in Kenya Matters in 2026

Starting in 2025, the Kenya Revenue Authority is enforcing stricter income and expense validation through ETIMS.

So, what does this mean for you and your business?

If your purchases aren’t recorded on ETIMS, they could:

Not be recognized as business expenses – meaning you can’t claim them for tax purposes
Increase your taxable income – because unrecorded expenses count as profit
Lead to higher tax liability – paying more than you actually owe

This is especially important if you deal with:

Informal suppliers – like Mama Mboga or street traders
Small-scale traders who may not yet be on ETIMS
Non-compliant vendors who don’t issue electronic invoices

By using Reverse Invoicing on ETIMS in Kenya, you:

Capture all your expenses – even when suppliers aren’t on ETIMS
Stay fully compliant with KRA regulations
Reduce your tax exposure – and avoid unnecessary penalties

Tip:

Think of it as taking control of your purchases and ensuring every shilling is accounted for – so your business records are accurate and KRA-friendly.

Step-by-Step: Reverse Invoicing on ETIMS in Kenya

A) PART A: You, the Buyer – Creating a Reverse Invoice on ETIMS

Here’s how you can create a reverse invoice on ETIMS in Kenya step by step:

Step 1: Log in via eCitizen

Go to eCitizen on your browser.
Scroll down and open the KRA section.
Log in using your KRA PIN credentials.

Tip:

Make sure your KRA PIN is active and linked to your business details to avoid login errors.
You need to create an account if you don’t have one already.

Step 2: Access the Invoicing Menu

Once logged in, go to your ETIMS dashboard.
Click the “Buyer” option since you’ll be creating the invoice on behalf of your supplier.

Step 3: Click “Create Invoice”

You’ll now fill in the invoice details:

Supplier Details

Name of your supplier
Supplier’s KRA PIN

Transaction Type

Confirm the type of invoice

B2B – Business-to-Business
B2C – Business-to-Customer

Invoice Details

VAT or Non-VAT
Tax type (16%, 0%, Exempt)

Pro Tip: Double-check the KRA PIN and VAT details—they’re critical for approval.

Step 4: Add Items Purchased

For each item you bought, enter:

Item name
Quantity
Unit price
Total amount

Hint: If you have multiple items, add them one by one to ensure each is correctly categorized.

Step 5: Add Payment Details

Select how you paid for the items:

M-PESA
Cash
Bank
Other

Step 6: Preview the Invoice

Click “Show Preview”.
Carefully check for errors – wrong amounts or VAT info can cause rejection.

Step 7: Create Invoice

Click “Create Invoice”

Your invoice will now appear as: Complete (Pending Approval)

You can track its status under:

Pending – waiting for the supplier to approve
Complete – approved and valid

Now you’ve successfully created a reverse invoice on ETIMS in Kenya!

B) PART B: You, the Supplier – Approving a Reverse Invoice on ETIMS

Once your buyer has created a reverse invoice, it’s your turn to review and approve it. Here’s how to do it step by step:

Step 1: Log in via eCitizen

Go to eCitizen and access your KRA account.
Make sure you’re logged in with the KRA PIN linked to your business.

Tip: Using your active business KRA PIN ensures the invoice can be validated and approved correctly.

Step 2: Go to the Seller Menu

Open the Invoicing section on your ETIMS dashboard.
Click the “Seller” option to access invoices created on your behalf.

Step 3: Open Buyer-Initiated Invoices

Click “Buyer-Initiated” to view all invoices waiting for your action.
Look through the pending invoices carefully.

Step 4: Review the Invoice

Check that all details are correct:

Items purchased
Amounts charged
VAT or tax status

Step 5: Approve or Reject

Approve → The invoice becomes valid and recognized by KRA.
Reject → The buyer receives a notification to correct the invoice.

Once approved, your buyer is notified, and the transaction is fully compliant.

By following these steps, you complete the Reverse Invoicing process on ETIMS in Kenya, ensuring that all transactions – especially with informal or non-ETIMS suppliers – are properly recorded and compliant with KRA.

FAQs About Reverse Invoicing on ETIMS in Kenya

1. Is Reverse Invoicing on ETIMS in Kenya allowed?

Yes! The Kenya Revenue Authority (KRA) fully allows buyer-initiated invoices.

This means you can legally create a reverse invoice on ETIMS in Kenya even if your supplier hasn’t issued one yet.

2. Is Reverse Invoicing on ETIMS in Kenya mandatory?

No, it’s not mandatory.

However, it’s highly recommended if you want to stay compliant, especially when dealing with suppliers who are not fully registered on ETIMS or when you need to capture expenses accurately for KRA reporting.

3. What happens if my supplier rejects the invoice?

If your supplier rejects the reverse invoice:

Check for errors – verify item details, quantities, and VAT information
Correct the mistakes and resubmit the invoice through ETIMS

4. Can I create a Reverse Invoice on ETIMS if I’m not VAT registered?

Yes! Reverse Invoicing on ETIMS in Kenya works for both VAT-registered and non-VAT businesses.

You can generate fully compliant invoices regardless of your VAT status, ensuring your purchases are recognized by KRA.

5. Does Reverse Invoicing on ETIMS in Kenya cost anything?

No. Generating a buyer-initiated invoice on ETIMS is completely free for all businesses.

Recommended Articles

If you’re new to ETIMS, you should also read:

These will help you fully understand how Reverse Invoicing on ETIMS in Kenya fits into the bigger picture.

Conclusion

Reverse Invoicing on ETIMS in Kenya is one of the smartest tools you can use today to stay compliant and in control of your business transactions.

By allowing you to:

Create invoices yourself
Capture all expenses
Ensure KRA compliance

Especially when dealing with informal suppliers or small-scale vendors, mastering Reverse Invoicing on ETIMS in Kenya is no longer optional – it’s essential for smooth, tax-compliant business operations.

Need Expert Help? Quartet Consulting Can Guide You

If you want to avoid tax issues, stay fully compliant, and simplify your invoicing process, Quartet Consulting is here to help.

We offer tax solutions and advisory services that include:

Step-by-step guidance on ETIMS and Reverse Invoicing in Kenya
Assistance with KRA compliance and VAT reporting
Support for small businesses, SMEs, and informal sector vendors

Get in touch today and request a free tax quote – ready within 48 hours – to make sure your business is fully compliant and all your transactions are accurately recorded.