Why KRA Made U-turn On Electronic Tax Registers on Mpesa

Kenya Revenue Authority (KRA) has shifted the plan to use Mpesa till numbers as Electronic Tax Register (ETRs) to focus on small and medium enterprises (SMEs) for better compliance.

In October 2024, the body had set a plan of partnership with Safaricom to turn till number into electronic tax registers, with an aim of integrating the KRA system to mobile operators to cub tax evasion.

However, this plan was highly criticized by the public questioning their data privacy and cost. Safaricom CEO Peter Ndegwa opposed the move stating that the process will hinder M-pesa operations by interfering with the progress made in digitizing.

“We are the largest taxpayer, so we are quite conscious about the need to pay taxes but also for our customer base, we are also conscious that this country has made significant progress on digitization and therefore we need to make sure even as authorities try to expand the tax base, we do not roll back some of the benefits we have seen on digitization,” he said

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KRA has now reconsider the plan to focus on SME while holding the electronic tax registers for further discussion. While noting that electronic tax registers are still important, the shift to SMEs is their part of a larger vision to modernize Kenya’s tax system since they6nake up 90 per cent of the Kenyan market contributing 40 per cent GDP.

Moreover this action will help KRA achieve its Sh2.92 trillion revenue target set for 2024/25. In order to enhance a smooth and more digital payment systems KRA aims to create a tax environment that is fair, transparent, and conducive to economic growth.