The short answer
Whether a business in this trade has to issue eTIMS invoices follows from the rules that apply to any Kenyan business, not from the trade itself; the rules on who must comply are what decide it. What the trade changes is the shape of the job. Invoice trade tied to certified progress, retention and often withholding tax. Material purchases must carry compliant invoices too, because the deductibility of project costs depends on it.
A contracting business building or renovating structures, billing against progress on projects.
How stock behaves in this trade
Materials bought per project and consumed on site, where site wastage and pilferage are significant and cost overruns are discovered only after they have happened. The usual lines are building and civil works, renovation and fit-out, specialist trades and project management.
What invoicing actually looks like here
Invoice trade tied to certified progress, retention and often withholding tax. Material purchases must carry compliant invoices too, because the deductibility of project costs depends on it.
What tends to go wrong
- Material wastage and site pilferage
- Progress billing disputed by clients
- Retention held for months after completion
- Subcontractor payments against certified work
Customers here usually pay by bank transfer, progress payments against certificates and m-pesa for small works.
How customers pay in this trade
Payment in a construction business usually comes through bank transfer, progress payments against certificates and m-pesa for small works. That mix decides how hard reconciliation is: every separate channel is a separate record that has to agree with the sales it paid for, and the trades that struggle most are the ones running three or four at once without anything joining them up.
Compliance angles that apply to this trade
- vat registration
- withholding tax
- invoice contents
- customer pin
- deductibility
- retention
What the rules say
This page explains how a requirement generally works. It is not tax advice, and it cannot account for the specifics of any one business. For a position you intend to rely on, confirm with KRA directly or with a registered tax agent.
Tax rules in Kenya change with each Finance Act and with regulations made during the year. Before acting on any figure, deadline or threshold, check the current position on KRA's own website.
What we are not stating here. Some of the specific requirements relating to this topic have not yet been verified against their primary source by our reviewer, so they are withheld from this page rather than stated from memory. That means you will not find a threshold, rate, deadline or penalty figure below. For those, check KRA directly. Everything else on this page explains how the mechanism works and is not affected.
Common questions
Does a construction business need to issue a tax invoice for every sale?
Invoice trade tied to certified progress, retention and often withholding tax. Material purchases must carry compliant invoices too, because the deductibility of project costs depends on it.
What usually goes wrong with records in a construction business?
The recurring problems in this trade are material wastage and site pilferage; progress billing disputed by clients; retention held for months after completion; subcontractor payments against certified work. Each of them shows up in the records before it shows up in the bank balance.
How should a construction business keep stock records?
Materials bought per project and consumed on site, where site wastage and pilferage are significant and cost overruns are discovered only after they have happened. Records that do not reflect that pattern will not tell you anything useful, whatever system produces them.
How do I know this information is current?
Tax rules in Kenya change with each Finance Act and with regulations made during the year. Before acting on any figure, deadline or threshold, check the current position on KRA's own website.
More for construction businesses
- Who must comply for construction businesses
- Registering for eTIMS for construction businesses
- Choosing an eTIMS channel for construction businesses
- Issuing an eTIMS invoice for construction businesses
- Credit and debit notes for construction businesses
- Expenses and deductibility for construction businesses
- Working offline for construction businesses
- Records and audit for construction businesses
- VAT registration for construction businesses
- Turnover Tax for construction businesses
- What eTIMS costs for construction businesses
- Stock and inventory control for construction businesses
- M-Pesa reconciliation for construction businesses
- Staff and shrinkage for construction businesses
- Choosing a POS system for construction businesses
- Pricing and margin for construction businesses
- Suppliers and purchase records for construction businesses
Related trades
Sources
- officialeTIMS (Electronic Tax Invoice Management System) — Kenya Revenue Authority, checked 2026-09-18
- officialValue Added Tax Act, 2013 (Act No. 35 of 2013) — National Council for Law Reporting (Kenya Law), checked 2026-09-18
- officialKenya Revenue Authority — Kenya Revenue Authority, checked 2026-09-18
- officialIncome Tax Act (Cap. 470) — National Council for Law Reporting (Kenya Law), checked 2026-09-18
- officialFinance Act, 2023 (Act No. 4 of 2023) — National Council for Law Reporting (Kenya Law), checked 2026-09-18
- officialTax Procedures (Electronic Tax Invoice) Regulations, 2024 — Kenya Gazette / Kenya Law, checked 2026-09-18