Kenya Revenue Authority (KRA) plans to ramp up its ordinary tax collection initiatives by enabling Kenyans to generate tax invoices through the popular instant messaging platform WhatsApp.  Hakamba Wangwe (pictured), the KRA Chief Manager, DTD-eTIMS said this initiative, to be launched soon, will complement existing platforms like the Unstructured Supplementary Service Data (USSD) and mobile apps, aiming to simplify compliance for taxpayers nationwide.

“Kenyans will very soon be able to generate tax invoices on WhatsApp. The idea is to embed solutions within a taxpayer’s ecosystem, in essence, to be able to find taxpayers where they are,” Wangwe said.

Compliance support

She was speaking at the KRA headquarters during a media engagement and awareness session on compliance support for Micro, Small and Medium Enterprises (MSMEs).

With over 34.5 million smartphone users in Kenya, she said KRA’s digital solutions are timely and impactful, ensuring inclusivity for both smartphone and feature phone users.  The growing embrace of digital technology and connectivity in Kenya underscores the importance of such initiatives. In addition to smartphones, feature phones remain popular, with an estimated 31.2 million users relying on these devices because of their affordability and long battery life.

She said by catering for both smartphones and feature phones, KRA is ensuring that its tax collection measures are inclusive and accessible to a broad spectrum of the population. 

This dual approach not only enhances compliance but also supports the country’s digital transformation effort, “paving the way for a more efficient and transparent tax system,” Wangwe said.

KRA projects to collect over Sh3 trillion in ordinary taxes for the financial year 2024/25, up from Sh2.4 trillion in the last fiscal year.

By activating WhatsApp as an optional tax generation platform, authorities aim to reach MSMEs, particularly those operating in the informal economy.

This strategy aims to broaden the tax base by bringing more business into the tax net, ultimately fostering a fairer business environment and improving overall tax compliance.  The move comes barely a week after Moses Kuria, a senior member of the Council of Economic Advisors to the President announced that come December, all mobile payment platforms’ Pay bill numbers will be integrated into the ETR tax framework, enabling KRA to capture a vast array of digital transactions that currently evade taxation.

KRA faces significant challenges prompting this technological shift. The authority deals with a limited tax base; only about 8 million taxpayers out of over 53 million Kenyans filed returns as of June 30, 2024, leading to revenue shortfalls.         – Noel Wandera

Tax evasion is also widespread, with many underreporting income or failing to remit withheld taxes.

The current compliance processes are also often viewed as complicated and burdensome, discouraging many from fulfilling their obligations. Long queues are also a source of detraction from the taxpayer experience.