The Kenya Revenue Authority (KRA) has announced major changes that will affect exporters across the country, with the export process in the Integrated Customs Management System (iCMS) set to be fully linked with the Value Added Tax (VAT) return in iTax beginning May 2026.
In a notice, the Commissioner for Micro and Small Taxpayers said the move aims to improve the accuracy, compliance, and efficiency of exporters’ declarations of zero-rated supplies.
Once implemented, validated export values captured in iCMS will automatically be prefilled in the VAT return filed through iTax.
KRA said the integration will apply to exports destined for countries within the Single Customs Territory as well as other foreign destinations.
It will also cover exports processed through Export Processing Zones (EPZs) and Special Economic Zones (SEZs), bringing all export categories under one automated system.
KRA on How the New System Will Work
Under the new arrangement, once Customs validates an export upon issuance of the relevant export documents, the confirmed export values will flow directly into the exporter’s VAT return.
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This means exporters will no longer have to manually enter export figures when filing VAT returns, reducing errors, delays, and potential disputes with the tax authority.
KRA explained that for auto-prefilling to work, exporters and their appointed clearing and forwarding agents must accurately capture key details when lodging export documents in iCMS.
These include the exporter’s Personal Identification Number (PIN) and a valid TIMS or eTIMS zero-rated invoice number.
Only export values that have been validated in iCMS and properly linked to the exporter’s PIN and invoice will be allowed in the VAT return.
Any export transaction that is not validated or lacks the correct linkage will not be reflected in the VAT return, potentially affecting the taxpayer’s VAT compliance.
The tax authority further stated that exports of taxable services will also benefit from this automation.
Such services will be prefilled in iTax based on TIMS or eTIMS invoices generated and transmitted to KRA for the relevant tax period.
Implications for Exporters and Small Businesses
KRA said the integration is expected to ease compliance, especially for micro and small taxpayers, by reducing paperwork and streamlining reporting.
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Automated prefilling is also intended to enhance transparency and curb fraudulent VAT refund claims tied to fictitious or inflated export declarations.
However, the authority cautioned exporters to ensure full compliance with invoice-generation and data-capture requirements.
Failure to generate valid TIMS or eTIMS invoices or to correctly record export details in iCMS could lead to missing export values in VAT returns, exposing taxpayers to penalties or delayed refunds.
Clearing and forwarding agents have also been urged to pay closer attention when lodging export entries on behalf of clients.
Any errors made at this stage could directly affect the exporter’s VAT return, since the system will rely entirely on the data captured and validated by Customs.
KRA noted that the integration is part of its broader digital transformation strategy to leverage technology to improve tax administration, broaden the tax base, and promote voluntary compliance.
The authority encouraged exporters to familiarise themselves with the new process ahead of the May 2026 implementation date and to seek guidance where necessary.
Taxpayers requiring clarification have been advised to contact the KRA Contact Center by telephone or email, as outlined in the notice.
KRA said further communication and guidance will be issued as implementation draws closer, to ensure exporters and their agents are adequately prepared for the transition to the integrated system.
