A growing compliance crisis in Nairobi’s Eastleigh trading hub is beginning to ripple across the country, disrupting supply chains and locking thousands of businesses out of legitimate tax claims.
- •The Kenya Revenue Authority has now moved to contain the fallout, following mounting concern that slow adoption of the Electronic Tax Invoice Management System (eTIMS) is undermining trade in one of East and Central Africa’s busiest commercial centres.
- •At a consultative meeting with the Eastleigh Business District Association, tax officials acknowledged a widening “compliance gap” that is affecting businesses far beyond Eastleigh.
- •Many traders in the area are yet to fully adopt eTIMS, resulting in widespread issuance of non-compliant invoices.
“Many businesses across the country source goods from Eastleigh but face challenges in obtaining eTIMS invoices, which are critical for expense claims,” said Commissioner for Micro and Small Taxpayers George Obell.
Without the required digital documentation, businesses are unable to validate purchases or offset expenses, effectively increasing their tax burden despite legitimate transactions. The compliance gap is particularly acute among small and medium-sized enterprises, many of which rely on Eastleigh for stock.
Deputy Commissioner for Tax Base Expansion, Esther Wahome said the requirement applies across the board, regardless of whether a business is registered for VAT.
“This is about ensuring transparency and creating a level playing field for all businesses,” she said.
Traders cited a mix of structural and cultural challenges slowing adoption, including language barriers, complex tax procedures and limited access to KRA support services.
Many operators in the largely informal ecosystem said the transition to digital systems has been difficult to navigate.
KRA Shifts Tactics
In response, the Kenya Revenue Authority is now pivoting to a softer, facilitative approach aimed at boosting compliance without disrupting trade.
The authority plans to deploy officers fluent in local dialects to provide on-site support, while also setting up service desks inside Eastleigh malls to bring registration and onboarding closer to traders.
Additionally, KRA is promoting a mobile-based solution using USSD to simplify tax registration and filing.
Leaders of the Eastleigh Business District Association, including Secretary General Omar Hussein and CEO Mohammed Adan, backed the initiative and urged traders to embrace compliance.
They warned that failure to adapt could erode Eastleigh’s standing as a regional trading powerhouse.
The developments come amid a leadership transition at KRA, with the Board announcing that Commissioner General Humphrey Wattanga will not have his contract renewed and has proceeded on terminal leave.
In an interim move, Lilian Nyawanda has been appointed Acting Commissioner General. She previously served as Commissioner for Customs and Border Control.
