KRA to Track MPesa Transactions in War on Tax Cheats

The Kenya Revenue Authority (KRA) plans to link its system to telecommunication companies in a bid to track MPesa and other mobile money transactions.

The move is part of the taxman’s efforts to increase tax compliance and nab tax cheats as it aims to hit the Sh3 trillion tax collection target in the 2023/2024 budget, Business Daily reports.

KRA will be tracking the 16 percent value-added tax (VAT) on sales and the 20 percent excise duty charged on transactions. 

“As part of the economic turnaround plan, the government will scale up revenue collection efforts by the Kenya Revenue Authority (KRA) to Sh3 trillion in the Financial Year 2023/24 and Sh4 trillion over the medium term,” said Treasury in the draft 2023 Budget Policy Statement released on Wednesday.

As of November 2022, there were 73.2 million mobile money accounts in the country, with the value of transactions totaling Sh639.84 billion, according to Central Bank of Kenya (CBK) data.

Integrating the system will allow KRA to monitor mobile money transactions in real time, enabling it to identify people earning and living large while avoiding taxes.

Business Daily reports that KRA is seeking to match data from third parties including telcos and betting companies, capturing the flow of cash against tax remittances in the war on tax evaders.

Already, KRA has linked 16 betting companies to its system to allow real-time computation of taxes. This will see the bookmakers pay taxes on betting, gaming, lottery and winnings by 1am daily.