The Kenya Revenue Authority (KRA) will from January 1, 2026 begin validating income and expenses declared in tax returns using third-party data, a move that tightens scrutiny on how individuals and businesses report earnings and costs.
In a public notice dated November 7, 2025, KRA said the validation will apply to both individual and non-individual income tax returns and will be carried out when taxpayers submit their 2025 returns through the iTax platform.
“Effective 1st January 2026, [KRA] will begin validating income and expenses declared in both individual and non-individual income tax returns,” the authority said.
The taxman will cross-check declarations against multiple data sources, including “TIMS/eTIMS invoices, withholding income tax gross amounts, and import records from Customs systems.” This means expenses claimed in returns must match electronically generated tax invoices and other transaction records already held by KRA.
KRA stressed that all declared income and expenses must be backed by proper documentation, noting that “all declared income and expenses must be supported by a valid electronic tax invoice, correctly transmitted with the buyer’s PIN, where applicable,” subject to limited legal exceptions.
The validation will be conducted under the Tax Procedures Act and the Electronic Tax Invoice Regulations, 2024, reinforcing the authority’s push to close gaps between reported figures and actual economic activity. Taxpayers have also been encouraged to proactively reconcile their records, with KRA advising them to request “TIMS/eTIMS schedules of their current annual income and expenses from their designated account managers.”
The move signals a shift toward automated, data-driven enforcement as KRA seeks to reduce under-declaration and false expense claims, particularly among businesses that have struggled to fully align with electronic invoicing requirements.
KRA said it is open to stakeholder engagement ahead of implementation, noting that it “invites feedback and insights from taxpayers and stakeholders to facilitate a smooth and effective implementation of this validation process.”
With the changes taking effect at the point of filing 2025 returns, tax experts say taxpayers will need to ensure their invoicing, withholding tax, and customs records are fully aligned well before the January 2026 deadline.
