This archive report was first published on 24 September 2019.
Published on September 24, 2019, the Kenya Revenue Authority (KRA) is set to expand its tax net by monitoring mobile and online payments. The taxman is relying on the Data Protection Bill to gain access to individual digital money data, allowing it to compare figures in tax returns with transactions on mobile wallets.
With the Data Protection Bill pending Senate approval, KRA plans to store and match data on transaction flow on platforms like M-Pesa, PayPal, and Pesalink. This move aims to curb tax evasion on incomes from online sources by flagging differences in remittances and returns.
According to KRA Deputy Commissioner Joseline Ogai, the growing digital economy in Kenya necessitates pursuing incomes from mobile and online platforms. Ogai emphasized the importance of data matching in digital revenue monitoring, stating, "We are taking data matching very seriously as our next frontier in digital revenue monitoring. Soon, we will be able to catch tax cheats who make nil or few entries in their tax filings, yet the money they generate online is high."
Expanding the Tax Base ¶
KRA's move reflects the need to collect 1.9 trillion to finance ambitious government projects. By monitoring M-Pesa transactions, KRA aims to tax incomes from the informal sector and what many Kenyans term as "side hustles," including online gigs.
Furthermore, data from M-Pesa will force traders who avoid taxes through pay bills to contribute to the national tax basket. Some traders evade taxes imposed on pay bills by urging customers to send money directly to their personal M-Pesa wallets.
