The Kenya Revenue Authority (KRA) will officially start Monitoring M-Pesa Paybill Sytems on December 25th to Boost the country’s revenue collection by billions of shillings. This move will not only affect M-Pesa Paybills, but KRA also aims to target all payment service providers, including banks, with mobile money solutions.
Earlier in October 2024, Moses Kuria ( Former Cabinet Secretary ), now serving on the Presidential Economic Adviser Team, confirmed that the New KRA policy will see all the Digital Payment systems declared as Virtual electronic tax receipts (ETR) systems.
By Christmas 2024, all paybills will act as virtual ETRs for KRA revenue collection. This will digitize the revenue framework and ensure compliance across the board
Moses Kuria Duria KRA SUMMIT Day 3 in October 2024
The decision was reached due to a gap between the number of businesses operating nationwide electronic tax receipts (ETR) systems and the over 2 million payment points. This move specifically aims at businesses generating an annual income of more than Ksh 5 million that previously evaded VAT compliance.
The Physical Electronic tax receipts (ETR) record transactions in real-time as they happen, giving KRA an added advantage in revenue collection as they compute VAT and other taxes at the Point of Sale.
As of March, Safaricom reported over 1.2 million merchants actively using its Lipa na M-Pesa and Pochi la Biashara platforms. If the Policy comes into effect after Christmas Day 2024, it will extend KRA’s reach into these transactions, ensuring traders meet their tax obligations.
