Tax education push gains momentum as traders seek simpler compliance framework
By Viola Kosome, March 6, 2026Efforts to improve tax compliance among small businesses in Kenya are gaining momentum as traders across the country call for expanded tax education and simplified procedures to help them better understand their obligations.
Many Micro and Small Enterprises (MSEs) say they are willing to meet their tax responsibilities but often struggle with complex processes and limited awareness of how the tax system works. They argue that clearer guidance and consistent outreach programmes would help bridge the knowledge gap and encourage voluntary compliance.
The Kenya Revenue Authority (KRA) has, in recent years, introduced several reforms aimed at simplifying taxation for smaller enterprises, including the Turnover Tax regime, which targets businesses with lower annual revenues.
The authority says such measures are designed to broaden the tax base while making it easier for informal and small-scale traders to participate in the formal tax system.
However, despite these initiatives, a large proportion of registered taxpayers still do not remit taxes.
According to KRA data, Kenya has more than 22 million registered taxpayers, yet only about seven million pay some form of tax. Of these, roughly 3.5 million are formally employed workers who remit Pay As You Earn (PAYE) through their employers.
“Out of more than 22 million registered taxpayers in the country, only about seven million pay some form of tax, with around 3.5 million being formally employed and remitting Pay As You Earn (PAYE),” KRA Commissioner for Micro and Small Taxpayers George Obell said on Friday, March 6, 2026.
Public engagement
To address this gap, KRA is intensifying public engagement and plans to roll out a nationwide initiative dubbed Huduma Popote, which will deploy trained tax agents across the country to provide guidance and respond to taxpayer inquiries at the grassroots level.
The new approach mirrors the bank agent model, bringing tax services closer to businesses and individuals who may not have direct access to KRA offices.
These concerns and proposals were echoed during a Citizen Assembly organised by KRA in Kisumu, where traders urged the authority to step up awareness campaigns and simplify procedures.
Participants said many small business owners are ready to pay their fair share of taxes but require clearer information and support to navigate the system. They also proposed more flexible payment arrangements, including smaller and more frequent payments that align with the daily cash flow typical of small-scale enterprises.
Obell said the authority is keen on strengthening engagement with taxpayers to improve voluntary compliance and expand the country’s tax base.
He noted that KRA’s mandate goes beyond revenue collection to include educating citizens on taxation and implementing systems that make it easier for businesses to meet their obligations.
Obell revealed that the Western Region, which includes Kisumu, has the second-largest tax base in the country after Nairobi, with more than three million registered taxpayers and a potential revenue capacity estimated at over Ksh2 trillion.
However, only a small proportion of these registered taxpayers currently remit taxes, highlighting the need for continued education and outreach.