The Kenya government has announced plans to use mobile money paybill and till numbers as electronic tax registers (ETRs) by December 25 2024 in a move expected to widen its tax base and catch tax evaders, TechMoran has learnt.
Moses Kuria, Kenya’s senior economic adviser to President William Ruto, disclosed that the government is working to integrate M-PESA Paybills and Till Numbers as virtual ETRs.
Speaking during a tax summit on Wednesday the former Cabinet Secretary said, “We’ve agreed with the Commissioner-General that come Christmas 2024, all paybills will also be virtual ETRs for the purposes of tax collection. I know there is going to be some noise, but I also want you to tell me where we agree that someone will not pay taxes? Maybe I missed that point.”
True to his word, the move will elicit opposition from traders who rely on mobile money in Kenya as a one of their payment methods apart from bank transfers, cash and debit cards. However, these move might also discourage many merchants from using mobile money platforms bringing the numbers even lower.
There are over 2 million digital payment touchpoints across the country through Banks and Telcos but just 200,000 merchants people who have ETR devices for VAT. ETRs were supposed to curb all loopholes in VAT collection as they keep transactions history at the point of sale.
According to Kuria, integrating M-PESA paybill numbers will see over 2 million digital touchpoints, 10 times what KRA has now via ETRs.
“We have decided that there will be nowhere to hide for anybody. We already have a huge advantage because of the huge digitization of payment,” Kuria added.
During the summit, tax administrations were urged to harness the power of rapid technological advancements driving the global economy.
Kenya Revenue Authority (KRA) Commissioner General, Mr. Humphrey Wattanga, noted that KRA is exploring technologies such as the Internet of Things (IoT), Big Data, AI, and Blockchain to enhance its role in international trade and streamline tax processes.
“KRA recognizes the transformative power of technology in taxpayer services and operational efficiency. Our ongoing policy reforms and modernization efforts include implementing Application Programming Interfaces (APIs), AI, and Machine Learning, which will be pivotal for enhancing revenue mobilization through improved efficiency and compliance. APIs will facilitate seamless data exchange between KRA and taxpayers, streamlining tax filing and payment processes,” said the Commissioner General.
He reiterated that the integration of APIs, AI, and Machine Learning will not only boost tax collection but also foster trust and transparency within the tax system. He urged tax administrations to adopt a collaborative approach to enhance their capacity to detect, deter, and address tax evasion while fostering accountability in the global financial system.
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