The Kenya Revenue Authority (KRA) is stepping up its scrutiny of M-Pesa transactions and bank accounts, introducing measures that will give the tax authority unprecedented access to personal financial data. Financial coach Good Joseph explains that this new directive aims to widen the tax base by tracking detailed information on how Kenyans are moving, receiving, and holding money.
According to Good Joseph, KRA’s mandate now includes comprehensive access to M-Pesa and bank account data. This means KRA will closely track mobile money transactions, which are widespread in Kenya’s economy, ensuring all taxable income is accounted for.
Legislative Background: A Sharp Contrast
Interestingly, this initiative contrasts with a decision by Kenya’s National Assembly Finance Committee in May 2024, which rejected a similar proposal. Treasury Cabinet Secretary Njuguna Ndung’u initially sought to amend the Data Protection Act, aiming to allow KRA access to citizens’ financial data without court orders. However, the Finance Committee, chaired by Molo MP Kuria Kimani, opposed these changes in the Finance Bill, which also sought additional tax collections.
Fuel Monitoring and eTIMS Expansion
KRA’s ambitions go beyond M-Pesa and bank transactions. Good Joseph highlights that motorists will now need to enter their KRA PINs when refueling, generating a digital invoice through the Electronic Tax Invoice Management System (eTIMS) to track fuel consumption. By logging these transactions, the government hopes to accurately track fuel sales, collecting taxes more effectively. This fuel monitoring is part of the larger rollout of eTIMS, which mandates electronic invoicing for businesses to ensure precise records of taxable income.
Despite these efforts, only around 120,000 businesses have registered on eTIMS so far, a number that Good Joseph views as insufficient given Kenya’s large small business sector. Through eTIMS and similar compliance systems, KRA aims to achieve transparency over revenue generated via digital payment platforms like M-Pesa PayBill and Till numbers.
Implications for Small Businesses and M-Pesa Users
This increased oversight will impact small businesses that depend on M-Pesa PayBill and Till numbers for daily transactions. Good Joseph notes that KRA now requires mobile payment options to be linked to its database, observing real-time fund flows. This includes data from M-Pesa statements, with transactions being logged and scrutinized to identify taxable income sources.
Balancing Revenue Collection and Privacy Concerns
Good Joseph raises an important question regarding KRA’s new measures: Are they a step toward economic growth or an intrusion into personal privacy? He explains that while Kenya’s national debt has surpassed 60% of GDP, a level that necessitates more aggressive revenue collection, many citizens feel this type of monitoring is invasive.
What Kenyans Need to Know Moving Forward
As KRA enforces these measures, Kenyans should familiarize themselves with KRA registration requirements, KRA PIN certificates, and iTax login procedures to stay compliant. Additionally, accessing and navigating the KRA portal, using tools like the KRA PIN checker, and staying updated on relevant policies will be crucial for individuals and businesses alike to avoid potential fines.