KRA and Safaricom implement strict oversight of businesses using Lipa Na M-Pesa services.

The Kenya Revenue Authority (KRA) has revealed a plan to tackle the issue of traders switching from mobile money payments to cash transactions to avoid tax obligations. Recently, KRA noticed a significant number of businesses, including those using Lipa Na M-Pesa, returning to traditional cash-based payments.

This change raised concerns, especially as KRA has intensified compliance checks in major urban centers. To enhance tax compliance, KRA has deployed around 1,400 revenue service assistants with paramilitary training. Their focus is on encouraging tax adherence among traders and facilitating online business registration.

During a Media Lab session in Nairobi, Chief Manager of the Domestic Tax Department, Caroline Rotich, shared that KRA is working with Safaricom to identify businesses that have abandoned Lipa na M-Pesa. Rotich explained, “Many businesses are now closing Lipa Na M-Pesa merchant accounts, Buy Goods, and Pochi La Biashara Tills. We are collaborating with Safaricom to get information on such traders who are jeopardizing tax compliance measures.”

This collaboration aims to gather data and conduct follow-ups through KRA’s RSA program to enhance compliance. The partnership is part of a broader strategy to ensure businesses meet tax obligations and eliminate potential tax evasion practices.

These initiatives are designed to maintain a fair and effective taxation system that supports the nation’s growth and development while discouraging any form of tax misconduct.

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