Kenya Revenue Authority has begun the pilot phase of the integration with telecommunications companies to monitor transactions in real time.
KRA to monitor mobile money transactions in real time
The system gives KRA data to catch those who have been under-declaring the value of their transactions to pay less taxes.
KRA has appointed a special team to draft details about how its Times Towers systems will be integrated with telco systems.
By linking the two systems, KRA will be able to see real-time transactions for taxation purposes.
“The process is in the initial stages of piloting. The integration with telcos is aimed at enhancing the visibility of real-time transactions and, as a result, provide daily trends upon which compliance measures can be taken to enhance revenue collection,” KRA Ag. Commissioner for Domestic Taxes David Mwangi told Business Daily.
The system gives KRA data to flag down tax cheats who have been under-declaring the value of their transactions to pay less taxes.
KRA's plans to meet Ruto's ambitious targets
KRA, which is led by newly appointed commissioner general Humphrey Wattanga Mulongo, was given a target to double tax collection by 2027 by President William Ruto.
In July, acting CG Rispah Simiyu confirmed KRA’s plans to monitor financial transactions on mobile money wallets, specifically till numbers and pay bills.
"What we are looking at is financial transactions. When you are looking at M-PESA, before you get to the day-to-day transfers, there are the pay bills, till numbers," she said in a media interview.
She gave an example of traders who engage in business but file nil returns.
"Let me give you an example. You are importing large goods and high-end vehicles, but remember when you're importing, it's coming through our points of entry so it means we can see it from the custom side.
"But then when you look at it from the domestic tax side you are filing a nil return. That gives us a reason to look further," she explained.
The integration of the tax system with telecommunication companies is seen as a move to tap additional revenue from the multi-billion industry.
Telcos in Kenya make billions by providing various services to customers such as voice calls, text messaging, internet access as well as mobile money services.
KRA allocated Sh1.2B to go after Kenyans evading tax
In October 2022, President William Ruto noted that There are only 7 million people with KRA PINs, while in the same economy, over 30 million Kenyans spend and transact billions through mobile money.
“The fact that this opportunity remains unclear to KRA demonstrates why radicle changes are necessary,” President Ruto said at the time.
In June KRA was granted an additional Sh1.2 billion in funding to strengthen its workforce.
By expanding its team, KRA aims to enhance revenue collection from planned levies and intensify its pursuit of tax evaders across the country.
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