Income tax in Kenya is charged pursuant to the provisions of the Income Tax Act (Chapter 470, Laws of Kenya) (“the ITA”). 

Taxable income comprises gross income earned or derived in Kenya after deducting expenses wholly and exclusively incurred in the production of that income( Section 15 of the ITA).

Effective 1st January 2024, any expenditure or loss claimed by a taxpayer is non-deductible for income tax purposes if it is not supported by an invoice generated through the Electronic Tax Invoice Management System (“e-TIMS”). This applies to all transactions, irrespective of value or nature, unless the transaction falls within the scope of exemptions issued under Section 23A of the Tax Procedures Act, Cap. 469B Laws of Kenya (“the TPA”). or published by the Commissioner in accordance with Section 23A and relevant subsidiary legislation.

Following amendments introduced by the Finance Act 2025, Section 23A of the Tax Procedures Act now limits exemptions from the e-TIMS invoice requirement to the following transactions: emoluments, imports, investment allowances, interest payments, airline ticketing, and payments subject to withholding tax.

All other expenses must be supported by e-TIMS-generated invoices to qualify as deductible for income tax purp...