The Kenya revenue Authority (KRA) is going after businesses that are opting out of using M-Pesa services including Lipa Na M-Pesa and Pochi La Biashara.
Speaking to the media on Tuesday, October 17, KRA Chief Manager in the Domestic Taxes Department Caroline Rotich, noted that the tax body was aware of the decline in the use of M-PESA to pay for services.
Further, she added that the authority was working with Safaricom to get information on the businesses doping out to allow them to do compliance checks.
“It is already noted that the closure of Lipa Na M-Pesa merchant accounts is happening in the market. We are working on strategies on how we can work around this.
‘We are working together with Safaricom to facilitate integration, we will get information on these dropouts so that from there we can do follow-ups and compliance checks,” stated Rotich.
Also Read: KRA Officials Visiting Homes Lay Trap for Nyeri Businesswoman
KRA on Businesses Using Cash for Transactions
Additionally, the Tax Procedures Act allows the authority to link its iTax systems with third parties including banks and mobile money platforms like M-PESA to spy and monitor taxpayer’s activity.
According to Rotich, the said businesses were opting out of using mobile money transactions and using cash transactions instead as a way of evading tax payments.
However, the taxman assured Kenyans that it would catch up with the traders who were use cash payments to evade tax payments using its officers on the ground.
“We have several officers now who are doing compliance checks around the main towns. This will help us address this issue,” added Rotich.
The M-PESA and other mobile payments have been especially adopted in the recent past by small scale traders like food vendors to separate their personal and business funds.
Expectations on Businesses Paying Tax
The Tax body expects small traders with annual sales revenues of between Ksh1 million and Ksh25 million to pay turnover tax at the rate of three percent of their gross annual sales from July 2024.
Notably, the percentage is an increase compared to the one percent charged on gross sales between Ksh1 million and Ksh50 million.
KRA is leveraging increased use of third-party data to help them hit a target of nearly Ksh2.5 trillion for the financial year ending in June 2024.
Also Read: Viral Mganga Who Cures Tax Issues Catches KRA Attention
Deployment of Revenue Service Assistants to Local Businesses
KRA announced that it had deployed 1,400 Revenue Service Assistants (RSAs) across the country to assist Kenyans with tax compliance and online facilitation on September 25, 2023.
Under the initiative, the assistants would conduct physical visits to taxpayers’ premises to execute different tasks including facilitating the online registration of trading companies and verifying taxpayer information.
They are also required to offer support in compliance with excise regulations and assist in the collection of data for tax-related purposes.
“The Kenya Revenue Authority (KRA) wishes to inform the public that it has introduced a Revenue Service Assistants (RSAs) program.
“Their mandate is to assist taxpayers with their compliance needs. The RSAs will provide on-site assistance to taxpayers, which will involve physical visits to taxpayers’ premises within the country,” KRA noted in a notice.
