CassKai Kenya - IFRS Accounting Software & KRA eTIMS E-Invoicing

Q: What accounting standard is mandatory in Kenya?

Kenya applies full IFRS for listed companies, banks and insurance companies, and IFRS for SMEs for non-listed SMEs. ICPAK (Institute of Certified Public Accountants of Kenya) oversees standards enforcement. CassKai natively supports both frameworks and automatically generates compliant financial statements: Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity.

Q: Is eTIMS mandatory and how does CassKai connect to it?

Yes, eTIMS has been mandatory since 1 September 2024 for all taxpayers in Kenya, whether VAT-registered or not. All invoices must be transmitted in real time to the Kenya Revenue Authority (KRA). Expenses not supported by a compliant eTIMS invoice are no longer tax-deductible. CassKai integrates directly with eTIMS via API: automatic generation of the Control Unit Invoice Number (CUIN), fiscal QR code and instant transmission to KRA. No process change for your users.

Q: What are the VAT rates in Kenya and how are returns filed?

Kenya applies three VAT rates: 16% (standard), 8% (reduced, petroleum products) and 0% (exports and essential goods). Monthly returns are filed via the iTax portal before the 20th of the following month. eTIMS automatically pre-fills sales data. CassKai computes collected and deductible VAT, prepares compliant returns and synchronises with iTax and eTIMS with no manual re-entry.

Q: How does CassKai handle Kenyan PAYE and social contributions?

CassKai supports PAYE (progressive scale from 10% to 30%), NSSF (6% employer and 6% employee), SHIF (2.75% of gross salary, progressively replacing NHIF) and the Affordable Housing Levy (1.5% employer and 1.5% employee). Automatic generation of payslips, contribution calculations and preparation of P10 (PAYE) returns to be filed on iTax before the 9th of the following month.

Q: Does CassKai handle the Kenyan Shilling and multi-currency USD/EUR?

Yes, CassKai natively supports the Kenyan Shilling (KES) as well as all major currencies (USD, EUR, GBP). Multi-currency is essential in Kenya: tea, coffee and flower exporters invoice in USD, Nairobi tech hub operates on USD contracts, and many SMEs have significant dollar exposure. CassKai manages CBK exchange rates, books FX gains and losses and produces KES financial statements while preserving the traceability of transactions in their original currency.

Q: What are the thresholds and tax regimes for Kenyan SMEs?

Kenya offers several regimes depending on turnover: Turnover Tax (TOT) at 3% of turnover for very small businesses (between 1M and 25M KES, in lieu of CIT); standard regime above 25M KES with corporate income tax at 30% and VAT at 16% if turnover exceeds 5M KES. VAT registration is mandatory upon crossing the 5M KES threshold on a rolling 12-month basis. CassKai automatically adapts to the applicable regime and adjusts filings, VAT periodicity and eTIMS obligations.

Regulations

IFRS and IFRS for SMEs

Kenya applies full IFRS for public interest entities (listed companies, banks, insurers) and IFRS for SMEs for small and medium-sized enterprises. The Institute of Certified Public Accountants of Kenya (ICPAK) oversees the application of these standards. Mandatory financial statements: Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity.

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KRA eTIMS - Electronic Tax Invoice Management System

Mandatory e-invoicing system since 1 September 2024 for all taxpayers, including non-VAT registered businesses. Every invoice must be transmitted in real time to the Kenya Revenue Authority (KRA) via eTIMS. Purchases not supported by a compliant eTIMS invoice are no longer tax-deductible. Severe penalties apply for non-compliance.

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Income Tax Act and VAT Act

Kenyan tax framework governing corporate income tax (30% for residents, 37.5% for non-resident branches), VAT (16% standard rate, 8% on petroleum products, 0% on exports) and PAYE (progressive scale from 10% to 30% on salaries). Updated annually through the Finance Act.

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NSSF and SHIF (formerly NHIF)

Mandatory social contributions: NSSF (National Social Security Fund) at 6% of gross salary on the employer side and 6% on the employee side (Tier I and Tier II); SHIF (Social Health Insurance Fund) progressively replacing NHIF with a 2.75% contribution on gross salary. Registrations managed via the KRA employer portal.

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E-invoicing

KRA eTIMS (Electronic Tax Invoice Management System)

Kenya rolled eTIMS into full production on 1 September 2024, making the country one of the most advanced in Africa on e-invoicing. All taxpayers, whether VAT-registered or not, must transmit invoices to the Kenya Revenue Authority in real time via eTIMS Online (web), eTIMS Lite (mobile) or direct API integration. Penalties for non-compliance are severe and expenses not supported by a compliant eTIMS invoice are no longer deductible for corporate income tax purposes.

✓Direct API integration with eTIMS for real-time transmission of invoices to KRA
✓Generation of the Control Unit Invoice Number (CUIN) and fiscal QR code on every invoice
✓Automatic VAT calculation at 16% (standard), 8% (petroleum products) or 0% (exports)
✓Customer and supplier KRA PIN management with online validation
✓Secure electronic retention of invoices and tax journals for 5 years (Tax Procedures Act)

Tax Specifics

Kenyan tax regime

The Kenyan tax system is governed by the Income Tax Act, the VAT Act 2013 and the Tax Procedures Act, and administered by the Kenya Revenue Authority (KRA). Kenya is a member of the East African Community (EAC) and COMESA. The iTax portal is the single entry point for tax filings, complemented by eTIMS for invoicing.

Main taxes and duties

VAT: standard rate of 16%, reduced rate of 8% on petroleum products, 0% on exports and certain essential goods. Monthly filings via iTax before the 20th of the following month.
Corporate Income Tax (CIT): rate of 30% for resident companies, 37.5% for non-resident branches. Quarterly installments (Installment Tax).
PAYE (Pay As You Earn): progressive scale from 10% to 30% on salaries. Withheld monthly by the employer. Affordable Housing Levy of 1.5% on the employer side and 1.5% on the employee side.
Withholding Tax: withheld at source on dividends (5% resident, 15% non-resident), interest (15%), royalties (20%), service fees and rents subject to tax treaties.
Turnover Tax (TOT): 3% on turnover for very small businesses (turnover between 1M and 25M KES), in lieu of corporate income tax.

Filing obligations

Monthly VAT return: filed via iTax before the 20th of the following month. eTIMS automatically pre-fills sales data.
Monthly PAYE: filing and payment before the 9th of the following month.
NSSF and SHIF: monthly remittance before the 9th of the following month.
Annual CIT: filed within 6 months of fiscal year-end (typically before 30 June for fiscal years ending 31 December).
KRA PIN: unique tax identifier mandatory for any entity or individual carrying out taxable operations.
eTIMS: real-time transmission of all invoices to KRA since 1 September 2024.

Accounting specifics and IFRS

Full IFRS: mandatory for companies listed on the Nairobi Securities Exchange, banks, insurance companies and other public interest entities.
IFRS for SMEs: applicable to non-listed SMEs. Simplified framework of 35 sections.
Financial statements: Statement of Financial Position, Statement of Comprehensive Income (P&L + OCI), Statement of Cash Flows (IAS 7), Statement of Changes in Equity and notes.
Functional currency: Kenyan Shilling (KES). Strong USD exposure for companies in the Nairobi tech hub and exporters of tea, coffee and flowers.
Mandatory audit: beyond the thresholds defined by the Companies Act 2015, by an ICPAK member.

Frequently Asked Questions

What accounting standard is mandatory in Kenya?

Kenya applies full IFRS for listed companies, banks and insurance companies, and IFRS for SMEs for non-listed SMEs. ICPAK (Institute of Certified Public Accountants of Kenya) oversees standards enforcement. CassKai natively supports both frameworks and automatically generates compliant financial statements: Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity.

Is eTIMS mandatory and how does CassKai connect to it?

Yes, eTIMS has been mandatory since 1 September 2024 for all taxpayers in Kenya, whether VAT-registered or not. All invoices must be transmitted in real time to the Kenya Revenue Authority (KRA). Expenses not supported by a compliant eTIMS invoice are no longer tax-deductible. CassKai integrates directly with eTIMS via API: automatic generation of the Control Unit Invoice Number (CUIN), fiscal QR code and instant transmission to KRA. No process change for your users.

What are the VAT rates in Kenya and how are returns filed?

Kenya applies three VAT rates: 16% (standard), 8% (reduced, petroleum products) and 0% (exports and essential goods). Monthly returns are filed via the iTax portal before the 20th of the following month. eTIMS automatically pre-fills sales data. CassKai computes collected and deductible VAT, prepares compliant returns and synchronises with iTax and eTIMS with no manual re-entry.

How does CassKai handle Kenyan PAYE and social contributions?

CassKai supports PAYE (progressive scale from 10% to 30%), NSSF (6% employer and 6% employee), SHIF (2.75% of gross salary, progressively replacing NHIF) and the Affordable Housing Levy (1.5% employer and 1.5% employee). Automatic generation of payslips, contribution calculations and preparation of P10 (PAYE) returns to be filed on iTax before the 9th of the following month.

Does CassKai handle the Kenyan Shilling and multi-currency USD/EUR?

Yes, CassKai natively supports the Kenyan Shilling (KES) as well as all major currencies (USD, EUR, GBP). Multi-currency is essential in Kenya: tea, coffee and flower exporters invoice in USD, Nairobi tech hub operates on USD contracts, and many SMEs have significant dollar exposure. CassKai manages CBK exchange rates, books FX gains and losses and produces KES financial statements while preserving the traceability of transactions in their original currency.

What are the thresholds and tax regimes for Kenyan SMEs?

Kenya offers several regimes depending on turnover: Turnover Tax (TOT) at 3% of turnover for very small businesses (between 1M and 25M KES, in lieu of CIT); standard regime above 25M KES with corporate income tax at 30% and VAT at 16% if turnover exceeds 5M KES. VAT registration is mandatory upon crossing the 5M KES threshold on a rolling 12-month basis. CassKai automatically adapts to the applicable regime and adjusts filings, VAT periodicity and eTIMS obligations.

The accounting and financial solution designed for Kenya

Regulations

IFRS and IFRS for SMEs

KRA eTIMS - Electronic Tax Invoice Management System

Income Tax Act and VAT Act

NSSF and SHIF (formerly NHIF)

E-invoicing

KRA eTIMS (Electronic Tax Invoice Management System)

Tax Specifics

Kenyan tax regime

Main taxes and duties

Filing obligations

Accounting specifics and IFRS

Frequently Asked Questions

What accounting standard is mandatory in Kenya?

Is eTIMS mandatory and how does CassKai connect to it?

What are the VAT rates in Kenya and how are returns filed?

How does CassKai handle Kenyan PAYE and social contributions?

Does CassKai handle the Kenyan Shilling and multi-currency USD/EUR?

What are the thresholds and tax regimes for Kenyan SMEs?

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