What happened

Petroleum dealers in Kenya have collectively urged the Kenya Revenue Authority (KRA) to suspend the electronic Tax Invoice Management System, known as eTIMS, until their concerns are addressed. The request, reported in the Daily Nation, stems from a growing perception that the digital platform adds costly compliance steps and creates real‑time reporting pressures that many small and medium‑sized fuel stations are ill‑equipped to handle. Dealers argue that the system, introduced to improve tax collection and curb fraud, is now jeopardising their day‑to‑day operations and could ultimately affect fuel availability for consumers.

Context and background

The eTIMS platform was rolled out by KRA in early 2022 as part of a broader digitalisation agenda aimed at modernising tax administration. Under the system, every fuel sale must be recorded electronically, with invoices transmitted instantly to KRA’s servers. The move was intended to close loopholes that allow under‑declaration of fuel volumes, a practice that historically eroded the tax base and contributed to fuel smuggling.

Since its launch, the petroleum sector has faced a series of implementation challenges. Many dealers, especially those operating in remote counties, lack reliable internet connectivity or the hardware needed to run the software smoothly. In addition, the cost of acquiring certified point‑of‑sale devices and training staff has strained cash flows that are already tight due to fluctuating global oil prices and local tax rates.

Industry bodies, including the Kenya Petroleum Oil & Allied Workers Union (KPOAWU) and the Kenya Association of Petroleum Marketers (KAPM), have echoed the dealers’ frustrations. In statements to the Daily Nation, they highlighted that the eTIMS deadline extensions granted in 2023 have not resolved the underlying technical glitches, and that some stations have experienced system downtimes that forced them to halt sales temporarily. The dealers’ petition to KRA therefore reflects a culmination of months of dialogue, protests, and even a few brief shutdowns of fuel pumps in major towns.

Compared with what is normal

Prior to eTIMS, fuel retailers relied on manual logbooks and periodic paper submissions to KRA. While this method was slower and more prone to human error, it allowed dealers to batch their reporting at the end of each month, giving them flexibility to manage cash and inventory without constant digital oversight. The shift to real‑time electronic invoicing represents a stark departure from that norm.

• Reporting frequency: Manual reporting was monthly; eTIMS requires transaction‑by‑transaction uploads.
• Infrastructure demand: Previously only a basic cash register was needed; now dealers must invest in certified tablets, stable broadband, and backup power solutions.
• Compliance cost: Historical compliance costs were limited to occasional accountant fees; eTIMS adds recurring subscription fees and hardware maintenance.

Why it matters

The petition to suspend eTIMS matters for several reasons. First, any prolonged disruption in fuel sales can translate into higher prices at the pump, affecting both households and businesses that depend on diesel and gasoline for transport and production. Second, smaller dealers who cannot absorb the extra technology costs may be forced to close, reducing competition and potentially creating supply gaps in rural areas. Third, from a fiscal perspective, while KRA aims to boost revenue, the backlash could lead to lower compliance if dealers choose to operate off‑grid rather than face punitive penalties.

Moreover, the issue highlights a broader tension between digital tax initiatives and the capacity of Kenya’s informal and semi‑formal sectors to adapt. If KRA proceeds without addressing connectivity gaps and cost subsidies, the policy could inadvertently penalise the very taxpayers it seeks to bring into the formal economy. For finance teams within SMEs, the uncertainty around eTIMS compliance adds a layer of budgeting complexity, as they must now allocate funds for technology upgrades while monitoring volatile fuel margins.

Practical steps

• Engage with industry associations such as KAPM to stay updated on any negotiated relief measures or temporary suspensions announced by KRA.
• Conduct a quick audit of your current eTIMS hardware and internet reliability; document any outages that could be used to support a formal grievance.
• Explore short‑term financing options or supplier credit lines specifically earmarked for compliance upgrades, ensuring you do not compromise working capital.
• Maintain meticulous manual records as a backup while the digital system is under review; this dual‑record approach can safeguard against data loss during downtimes.
• Consult a tax professional to understand any interim filing allowances that KRA may grant while the suspension request is under consideration.

Tax Planning & Compliance services at Beavoren Ventures can help petroleum dealers of eTIMS, assess the financial impact of compliance, and liaise with KRA on behalf of your business.

Book a consultation with Beavoren Ventures today and let us handle your compliance, books, and advisory in one place.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.