Government suppliers face tighter payment checks as KRA links eTIMS to IFMIS

For businesses waiting to be paid by government, an invoice must now be recorded in the tax authority’s electronic system before it can be submitted for payment through the government’s financial system.

 

The Kenya Revenue Authority (KRA) and the National Treasury have linked the Electronic Tax Invoice Management System (eTIMS) to the Integrated Financial Management Information System (IFMIS), bringing tax invoices into the government’s payment process.

 

Under the new arrangement, suppliers must generate a valid eTIMS invoice before submitting a payment claim through IFMIS. The details on invoices submitted to government entities must correspond with those generated and recorded in eTIMS, KRA said in a notice issued on 31 August.

 

Suppliers will therefore need to ensure that the details submitted through IFMIS correspond precisely with the invoice recorded in eTIMS. KRA and Treasury say the integration will allow automated validation, but their notice does not specify what happens when the records do not match.

 

KRA and Treasury say the integration is intended to improve transparency and accountability in government transactions, streamline financial processes and strengthen tax compliance through automated validation of tax invoices.

 

Suppliers must keep their tax records up to date and be registered on eTIMS. Businesses using their own invoicing or enterprise resource planning systems can connect directly to eTIMS through an application programming interface, while KRA also provides Virtual and Online Sales Control Units for different invoicing needs.

 

The new requirement arrives against a much older problem: government has accumulated billions of shillings in unpaid bills to businesses that have already supplied goods or services.

 

The Pending Bills Verification Committee reviewed 91,911 claims worth Sh637.6 billion, according to Treasury’s 2026 Budget Statement. Claims worth Sh235.6 billion were recommended for settlement.

 

Treasury says Sh80.3 billion in roads-sector claims has since been settled through securitisation, while Sh155.3 billion in verified claims for other sectors remained outstanding.

 

County governments reported another Sh183 billion in pending bills as at 30 June 2025. Of that, Sh130.8 billion was classified as recurrent expenditure and Sh52.2 billion as development expenditure.

 

For a business, an unpaid government bill can mean wages, supplies, transport and other costs have already been paid while the money owed under the contract remains outstanding.

 

The new integration does not settle those debts. It changes the process that new payment claims must pass through, tying the government invoice to the tax record held in eTIMS.

 

The move comes as procurement and financial systems across government are being linked more closely.

 

On 25 August, Treasury Cabinet Secretary John Mbadi directed all 47 county governments to complete integration of the Electronic Government Procurement System (e-GP) with IFMIS by the end of September.

 

The e-GP system handles procurement, including tendering and contracting, while IFMIS manages government financial transactions.

 

For suppliers, the invoice at the end of that process now has to correspond with the electronic tax record before it is submitted for payment.

 

A government contract may begin with a tender and end with a payment. Increasingly, the records created along the way are expected to match.