CPA Wachira Joseph

CPA Wachira Joseph Tax advisor | Speaker and trainer on Tax & financial management.

14/08/2026

Finance Act 2026 has made eTIMS even more central to businesses.

The law now prohibits KRA from allowing deduction of expenses that are not supported by eTIMS invoices. There are a few exceptions, but that is the general rule.

That means you could end up paying higher taxes simply because a legitimate business expense, such as a whole year's rent, is rejected by KRA because the landlord did not give you eTIMS invoices in 2026.

So here's a simple eTIMS bookkeeping hack to protect yourself.

• Make this 1 rule non negotiable: No eTIMS invoice. No payment. Period.

Every time you pay a business expense, save three things together:

• eTIMS invoice
• Proof of payment
• Supplier details

At the end of every month, reconcile your bank/M-Pesa payments against your eTIMS invoices.

If you paid someone but can't find the eTIMS invoice, chase them immediately.

Don't wait until the 2027 tax filing season to discover that half your expenses can be deducted.

06/08/2026

KRA is not playing with London Distillers.

You definitely know London distillers. They cook and sell alcohol.

In 2020 and 2021, they sold alcohol and charged customers excise tax on behalf of KRA.

Excise tax is a tax govt charges walevi to discourage excessive drinking.

London Distillers then filed its own excise tax returns and told KRA: We owe you Ksh 895 million.

Note, KRA did not assess this tax. It is London Distillers that admitted it owed KRA the money.

That statement is the heart of this tax fight. Read it again.

The company paid Ksh 378 million and left Ksh 517 million outstanding. KRA immediately started pursuing the balance.

Then someone at London distillers came up with another idea.

Instead of negotiating with KRA, let's talk directly to the CS for Treasury Ukur Yatani and ask him to forgive the 517m.

The directors said, perfect! Go for it. Do it! Fast!

They wrote to the CS. Told him they are unable to pay. The CS agreed.

In January 2022, Treasury directed KRA to cancel 80% of the outstanding tax, plus 100% of the penalties and interest. London to pay 20% only.

London Distillers happily returned to Athi River thinking the tax fight was over.

KRA, however, retreated to Times Tower and embarked on a fault finding mission. They wondered,

How will we meet our tax collection targets if the person setting those targets can forgive taxes anyhowly?

Then one afternoon, KRA finally finds the fault. There is one dangerous sentence sitting quitely in Kenyan tax law. It says,

• Only KRA can initiate tax cancellation after determining that recovery is impossible, unduly difficult or expensive, or would cause hardship or inequity to the taxpayer. KRA then forwards the recommendation to the CS for approval. The CS cannot start the process or issue the directive on his own.

KRA sought the Attorney General's opinion of this sentence.

The AG, Kihara, agreed that Treasury's directive was illegal. Because,

- London Distillers had already collected the excise duty from consumers.
- The money was never London's.
- They were merely holding it on behalf of KRA before remitting it.
- They must pay it to KRA.

The AG gave KRA the green light to continue pursuing their tax.

When Treasury saw the AG's opinion, it quickly withdrew the letter. KRA resumed the hunt for its Ksh 517 million undettered.

When London Distillers saw KRA was not playing, they ran to the High Court and later to the Court of Appeal.

London Distillers argued that:
- KRA had no right to ignore or reverse a directive that had come from the National Treasury.
- They accused KRA of usurping powers that properly belonged to the National Treasury & Cabinet Secretary.
- They had legit expectations that the govt could not forgive tax and later unforgive it.

This week, the Court of Appeal has ruled that,

- A Cabinet Secretary cannot wake up one morning and cancel taxes that the law does not allow him to cancel.

London Distillers has been ordered to pay the Ksh 517 million.

Case closed.

Lessons.

• Self declared taxes are admissions. Don't assume they can later disappear through letters to Treasury.

• Excise duty and VAT collected from customers are public money. You are only holding them for KRA.

• If you disagree with a tax, challenge it through the objection and appeal process. Don't build your cash flow around the hope that someone at Treasury will make it disappear.

05/08/2026

The second most asked question yesterday came from cargo consolidators.

They asked,

What if I consolidate goods for 10 Kenyan importers, and each importer buys from 10 different suppliers in China.

In other words, 100 Chinese suppliers deliver goods to my warehouse in China.

How many KRA ACD reference codes are needed?

The answer is: 100 unique reference codes.

Why?

Because the ACD reference is generated per shipment from each exporter.

Each of the 100 Chinese suppliers must log into KRA's ACD portal and obtain an ACD reference code for the goods they are exporting to Kenya.

As the consolidator, your job is to ensure that every supplier delivering goods to your warehouse has obtained a VALID ACD reference code before the cargo is consolidated.

This has added an extra responsibility for you to verify that every ACD reference code is valid. Visit acd.kra.go.ke/verify

So one container does not mean one ACD code.

100 suppliers. 100 shipments. 100 unique ACD reference codes.

04/08/2026

There's one question everyone is asking about KRA's new ACD system.

Does the ACD system apply to consolidated cargo?

For example.

Ten Kenyan importers buy goods from China.

Instead of each shipping a separate container, a freight consolidator packs all ten consignments into one container.

So, who obtains the ACD code?

The answer is:

Each of the 10 cargos must have its own ACD reference code.

The exporter for each cargo must obtain an ACD code before the goods are loaded.

The consolidator then packs all the goods into one container, but each importer's cargo remains linked to its own ACD reference.

When the container arrives in Mombasa, each clearing agent uses the ACD code for their client's goods during customs clearance.

So, you have one container. Ten importers. And ten different ACD reference codes.

Key takeaway.

If you import through consolidated cargo, don't assume the consolidator has handled the ACD.

Ask them one question: Has an ACD reference code been obtained for my cargo?

04/08/2026

KRA's brand new ACD import system has been taken to court.

There is a Kenyan tech company called Greenworld Big Data Limited.

In 2023, KRA invited the company to Times Tower for a presentation.

Greenworld's director, Mr. Munene, says the company had developed a digital cargo declaration system called ACID.

The idea was, before cargo leaves China or any other country, the exporter declares it electronically. KRA then knows exactly what is coming into Kenya before the ship even sails.

Greenworld presented the system to KRA, hoping KRA would buy it.

During the presentation, Munene says, all the top KRA officials were nodding their heads and appeared wowed by the system.

Greenworld left thinking: Baas, hii software tunauzia KRA.

Fast forward to 3rd August 2026.

KRA officially launched the Advance Cargo Declaration (ACD) system without Greenworld.

Greenworld has now sued KRA and John Mbadi, claiming that,

- KRA copied its idea without paying for it.
- And that KRA only edited "I" from ACID.

Greenworld wants the court to order one of two things:

• KRA should stop using the ACD system. Or
• If KRA continues using it, KRA should pay Greenworld a 30% royalty on the value, savings, and efficiencies generated by the system.

The court will now answer one question.

- Did KRA independently develop the ACD system, or did it unlawfully copy Greenworld's technology?

03/08/2026

KRA has introduced a new critical rule for imports.

Starting today, 3rd August 2026, KRA has introduced a new import requirement for all sea cargo coming into Kenya.

If you import goods into Kenya by sea, there is a new system that you need to master.

It's called the Advance Cargo Declaration (ACD) System.

Every sea cargo destined for Kenya must be declared in this ACD system and have an ACD reference code before it leaves the exporting country.

Think of it as KRA saying: Before you send that cargo, tell me what it is you are bringing into Kenya. So I can prepare accordingly.

Here is how it works.

Before the goods are loaded onto the ship, the exporter logs into KRA's ACD system and uploads the following cargo documents:

• Draft Bill of Lading
• Commercial Invoice
• Freight Invoice
• Export Declaration

If everything is in order, KRA issues an ACD reference code.

That code must then be written on the final Bill of Lading.

Who is responsible for obtaining the ACD code?

The exporter or the shipper is responsible for obtaining the ACD code.

If you are importing from China, Mushaina, who is your seller & exporter, is responsible for obtaining the ACD code.

Every shipment gets its own unique ACD reference code. You cannot reuse an old one for another shipment.

KRA has reiterated that your freight forwarder is not allowed to obtain an ACD code for your cargo using their own account.

The Chinese exporter must apply to KRA for its own account. And submit it's company registration details, tax ID and contact details.

Shipping lines and carriers must also verify that the ACD code is valid. And ensure that it is correctly shown on the final Bill of Lading before the goods are loaded for Kenya.

Your responsibility as the Kenyan importer is to make sure that the ACD reference code has been obtained and added to the bill of lading.

Once the goods reach Mombasa port, your clearing agent shall use the same code to clear the goods.

Without a valid ACD reference, the cargo may face clearance delays, penalties, rejection, or even seizure.

KRA has stated the system is free for now. But can start charging in future.

Key takeaway.

Before your supplier loads the cargo, ask them:

- Have you obtained the ACD reference code and added it to the Bill of Lading?

31/07/2026

KRA tried to tax the same money twice.

There is a company called Equator Bottlers. They cook and sell sodas in Kisumu Dala.

I went there to apply for an attachment in April 2015.
Nikakaa kwa reception nimengojea waniulize nakunywaga soda gani. Wakaninyima. Imagine.

As Equator was busy cooking sodas. KRA was busy cooking their tax bill.

When KRA was done, what came out was a maddening tax bill.

Between 2019 and 2022, Equator hired technicians and IT gurus from South Africa to automate its soda making machines.

Equator paid them in full. They packed their bags and went back home.

Then KRA audited Equator. They looked at the payments and announced.

- Guys, you should have withheld tax before paying the South Africans. Instead, you let them carry all the money. Now what will Kenya eat?
You must now pay that money from your pockets.

Equator Bottlers fired back:

- True, we did not withhold tax.
But the South Africans have already paid tax on that income in South Africa.
If Kenya taxes the same income again, that would be double taxation. And Kenya and South Africa have a tax treaty that exists to stop exactly that.

KRA became even more firm: We tupatieni pesa. We want our taxes.

As the arguments intensified, shrewd accountants at Equator remembered one hidden sentence inside the Kenya–South Africa tax treaty.

It says:

- If a taxpayer believes the same income is being taxed in both countries, they can ask either country's tax authority to talk to the other country's tax authority and agree on who should tax it.

Think of it as. Nyinyi kaisari endeni muongee. Mkisikilizana mutaniambia nimlipe nani.

Equator quickly told the South African suppliers to approach the South African Revenue Service (SARS). And complain about double taxation.

They did. And SARS agreed there was a genuine issue and formally opened discussions with KRA.

But while the two tax authorities were talking, KRA sent a maddening tax demand to Equator.

Equator ran to court. It argued that,

- KRA was at the talking stage with SARS.
- KRA should first complete the discussions with SARS, decide which country had the right to tax the income, and only then demand tax, if any was still payable.

- Equator prayed the court to pause the case until the two revenue authorities reached an agreement.

KRA fired back and argued that:

- Equator was simply buying time and delaying the case.

- KRA also argued that Equator, as the taxpayer, should have approached KRA directly to initiate the Mutual Agreement Procedure instead of going through its South African supplier.

- For that reason, KRA urged the court not to pause but proceed with the case and deliver its judgment.

The tax tribunal looked at the case. And noted that,

- a genuine Mutual Agreement Procedure was already underway because KRA had agreed and started talking to SARS.

The Tribunal paused the case and ruled that:

- Equator & KRA and SARS should continue talking under the Mutual Agreement Procedure for the next four months.

If they agree, well and good.

If they do not agree, the matter will go for full court hearing and judgement.

Lessons.

• Kenya's tax treaties are real. If you're facing double taxation, use them.

• The Mutual Agreement Procedure is simply two tax authorities talking so the taxpayer doesn't pay tax twice.

• Structure your cross border payments carefully. Or KRA will structure them for you.

30/07/2026

New update.

The new Tax Amnesty kicked off in Kenya on 1st July 2026.

• Here is how it works.

KRA will automatically delete your penalties, interest, and non compliance fines under one condition:

You must pay the principal tax (the actual tax due) before 2027.

That means you have 5 months left to clear your principal tax.

• What period does it cover?

It covers tax liabilities that arose between 1st January 1974 and 31st December 2025.

• Example

Suppose your actual tax bill for 2021 was Ksh 100,000.

You couldn't pay it because of cash flow challenges.

Over the years, penalties and interest accumulated to Ksh 30,000.

If you pay the 100,000 before 2027,

KRA will take the rubber and erase the 30,000.

• One question many people are asking

Will KRA also waive the penalties for filing your 2025 tax return late?

The answer is Yes.

• How do I apply for the amnesty?

There is no application & begging KRA required. Simply pay the principal tax. KRA will automatically delete the penalties, interest, and eligible fines.

• Has KRA started the automatic deletion?

Not yet. The system is still under development.

• When will the system be ready?
I have no clue.

• How will I know my tax debts have been erased?
KRA will email you a Tax Amnesty Certificate as proof. Keep it very well for future reference.

• I don't owe any principal tax. I only have penalties, and they are preventing me from getting a Tax Compliance Certificate. What should I do?

DM on X. They have been manually deleting such penalties so taxpayers can obtain their TCC.

On a side note. Some sharper boys have told me they m-pesad KRA 1 bob and KRA auto deleted their penalties.
I am not saying you do that.

• So what should you do today?

- Audit your iTax ledger.
- Identify any outstanding principal tax.
- Pay the principal tax before 2027.
- Leave the penalties, interest, and fines untouched.

KRA will erase them.

28/07/2026

The Kenyan Government promised to pay DT Dobie's taxes. And DT dobie believed them.

Now DT dobie has been ordered to pay 1.1 billion shillings to KRA.

Here's what happened.

DT Dobie imported vehicle parts into Kenya. Normally, customs taxes are payable immediately.

But the Government stepped in and told DT Dobie: ndugu import all the parts you need first. We will pay your taxes later.
DT Dobie trusted the promise.

The company imported the parts without paying the customs taxes, expecting the law would soon be amended to exempt those imports. Or the government would do an RTGs transfer to KRA.

The amendment or RTGs never came.

Years later, KRA came knocking. KRA wants its 1.1 billion in unpaid taxes.

DT Dobie argued that it had relied on the Government's promise and that it would be unfair to demand the tax after encouraging the imports.

The court disagreed. It held that government promises cannot override the law. Until Parliament changes the law, the tax remains payable.

DT Dobie lost. It must now pay 1.1 billion to KRA.

Lesson.

- Promises are not tax exemptions.

27/07/2026

KRA claimed a company had promised to pay 300,000 tax. The company swore it never did.
The High Court had to intervene.

There is a company called Gebery Limited.

KRA officers from Thika station visited Gebery for a random tax compliance check. They forcefully tried to enter the premises, but the owner resisted and denied them entry.

They retreated.

In the evening, KRA sent Gebery an offence notice. Claiming that, when officers had "accessed" the premises, they found the company not keeping proper accounting records.

The director protested the offence in writing.

KRA then summoned her to the Thika station and ordered her to bring the company's accounting records. She sent her tax representative, Mapesa, with the documents.

A week later, KRA called again, inviting Gebery for a meeting to "close the file."

When Mapesa arrived, he was handed a form to sign. It reads 'Request for Settlement'.

As Mapesa is about to sign the form. Akaona Mapesa zimeandikwa hapo ndani. 300,000 shillings. Akaanza kutetemeka mikono. Mapesa akasimama.

He refused to sign. Saying he had no instructions from the director to request a settlement, and immediately walked away.

For context, when KRA believes a taxpayer has committed a tax offence, it may prosecute them in court. However, the taxpayer can admit the offence and request to settle it out of court. That's what is called a settlement or a plea deal.

• Lesson 1: Names are powerful. Choose your sons' and daughters' names carefully.

When Mapesa left, KRA became even more dramatic.

It posted the 300,000 settlement into Gebery's iTax account and demanded payment.

The director objected, arguing that the company had never admitted committing any offence or authorized anyone to request a settlement.

KRA rejected the objection, insisting that Mapesa had signed the settlement form and that the penalty was final.

Gebery ran to the High Court, arguing that KRA had imposed the 300,000 fine without following the law.

The law requires four things before KRA can issue a tax settlement order:

- The taxpayer must admit the offence in writing.
- The taxpayer must request KRA to settle the matter.
- The request must be reviewed by a KRA committee.
- KRA must issue a written settlement order.

The judge asked KRA to produce Gebery's written letter requesting for settlement. It wasn't there.

The judge asked for the committee minutes approving the settlement. They did not exist.

The judge concluded KRA's order for settlement and the subsequent objection decision to be unfair, unreasonable, procedurally flawed, illegal, and unconstitutional.

Gebery was ordered to pay nothing.

KRA was ordered to delete the 300,000 demand from Gebery's iTax account.

Case closed.

• Lesson 2

- Never sign any document at KRA simply because an officer asks you to.
Seek tax advice first.

- If you send a representative, give them clear instructions on what they can and cannot sign.

- Sharp boys and girls are everywhere. Be watchful.

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