Complete Guide to KRA e-Filing with TallyPrime

KRA compliance can be intimidating, but with TallyPrime, it's surprisingly straightforward. This guide walks you through the entire e-filing process. If you need expert setup, we offer hands-on TallyPrime training and compliance support in Ruiru and across Kenya.

What Changed for 2026 Before the mechanics, the rule that reshaped filing this year. From the 2026 Year of Income, the income and expenses you declare need to be supported by valid electronic tax invoices, transmitted correctly and carrying the buyer PIN where it applies. KRA validates at the point of filing and cross-references what you claim against what your suppliers reported.

The practical consequence: an expense with no matching eTIMS invoice behind it is an expense you may not be able to claim. The transitional concession that allowed non-eTIMS declarations for the 2025 period was a one-time arrangement. Filing accurately now depends on capturing invoices correctly all month, not on tidying up at the deadline — which makes Steps 1 and 2 below the most important part of this guide.

What You Need Before Starting ✓ Active KRA PIN ✓ Valid iTax login credentials ✓ TallyPrime configured with your business details ✓ Up-to-date transaction records (should already be in TallyPrime)

Step 1: Enable eTIMS in TallyPrime Navigate to F11 (Features) and ensure eTIMS is activated. This enables invoice-level tracking required by KRA.

Step 2: Configure Your Invoice Format All invoices must include:

• Sequential numbering
• Buyer and seller details
• Item descriptions with quantities and rates
• Total amount and tax amount
• Invoice date

TallyPrime automatically formats this correctly when eTIMS is enabled.

Step 3: Generate VAT Reports From the Gateway of Tally, go to: Reports → Tax Analysis → VAT Reports

Review your:

• Input VAT (VAT paid on purchases)
• Output VAT (VAT collected on sales)
• Net VAT payable

TallyPrime calculates this automatically based on your invoices.

Step 4: Export Data for iTax TallyPrime integrates with KRA's iTax system. The process is automatic:

1. Period selection (monthly or quarterly)
2. One-click export to iTax format
3. Upload directly from TallyPrime to KRA portal

Step 5: File Your Returns Through iTax:

1. Log in with your credentials
2. Import the exported TallyPrime data
3. Review calculations
4. File returns
5. Keep acknowledgment receipt

Know Your Deadlines

• VAT: return and payment due on or before the 20th of the following month
• PAYE and statutory deductions: by the 9th of the following month
• Late filing penalty: 5% of the tax due or KES 10,000, whichever is higher
• If you are VAT-registered but had no transactions, you must still file a NIL return — silence is not a filing

Common Mistakes to Avoid ❌ Incomplete invoice details (missing buyer PIN) ❌ Accepting supplier invoices that never reached eTIMS — their non-compliance becomes your disallowed expense ❌ Manual invoice adjustments without proper vouchers ❌ Mixing personal and business transactions ❌ Missing supporting documents ❌ Filing late (penalties increase after the due date)

Pro Tips for Smooth Filing ✓ File by the 10th rather than waiting for the 20th deadline — it leaves room to fix rejections ✓ Reconcile your eTIMS-transmitted invoices against your sales register every month, not every quarter ✓ Keep digital copies of all invoices for 5 years ✓ Reconcile bank statements monthly ✓ Run reconciliation reports weekly ✓ Maintain a VAT register separate from invoices

Troubleshooting Common Issues If your VAT doesn't match:

1. Check opening inventory values
2. Verify all purchases are recorded
3. Confirm VAT rates (16% standard, 0% exempt items)
4. Check for duplicate entries

If eTIMS upload fails:

1. Verify internet connection
2. Check invoice format compliance
3. Ensure all mandatory fields are populated
4. Contact your Tally partner if issue persists

After Filing Keep records of:

• Filing confirmation from KRA
• VAT payment proof
• Reconciliation reports
• Monthly bank statements

The entire process, once set up correctly, takes just 2-3 hours per month. TallyPrime handles the heavy lifting—you just need to ensure accurate data entry daily.

Need help with your first filing? Our team can guide you through every step.