The Kenyan government is set to integrate M-Pesa pay bills with electronic tax registers (ETRs), a plan revealed during the Kenya Revenue Authority (KRA) Summit 2024 held at Safari Park Hotel on October 9.
Senior Economic Advisor Moses Kuria took the opportunity to clarify his earlier comments regarding the integration, emphasizing that the initiative extends to all Payment Service Providers, not just M-Pesa.
“My attention has been drawn to media reports that my comments on Virtual ETRs were directed solely at M-Pesa. This is erroneous; I meant all Payment Service Providers, including Telcos and Banks. It is an industry-wide issue,” Kuria asserted.
He further insisted that the government would take stringent measures to ensure compliance, including blocking the activation of any mobile phone imported into the country without appropriate tax records.
The announcement aligns with President William Ruto’s administration’s objectives to bolster the country’s tax collection framework.
Kuria disclosed that there are currently approximately 200,000 ETRs in operation and integrating them with digital payment services is crucial for widening the tax base. He noted, “Digital payment in the Kenyan economy is at another level—envied by other countries. By Christmas, all paybills will function as virtual ETRs for the purposes of KRA.”
Kuria advocated for this initiative as a means to enhance tax compliance among merchants and businesses, highlighting that linking them would lead to a fairer taxation system, which could ultimately enable the government to lower income tax rates.
“Paying taxes is everyone’s obligation. When they fall into the tax bracket, the government will be able to lower the income tax rate for them,” he added.
Treasury Cabinet Secretary (CS) John Mbadi also affirmed the government’s commitment to work closely with KRA starting November 2024, focusing on innovative strategies to improve revenue collection. “It is only through innovation that we can enhance efficiency in our revenue mobilization efforts,” Mbadi stated.
However, as discussions around linking M-Pesa to KRA evolved, Safaricom, the parent company of M-Pesa, dismissed claims regarding the integration of its mobile money service with KRA’s systems, reinforcing their commitment to customer data safety and privacy.
Earlier in 2024, M-Pesa experienced a temporary service disruption, causing transaction delays for its customers, but the company has since assured users of the platform’s reliability.
