KRA Clarifies: Till Numbers Remain Exempt from Taxation

It’s essential to be cautious amid the circulating information about the Kenya Revenue Authority (KRA) and its alleged intentions regarding taxation on till numbers and mobile money transactions. The recent statement from KRA debunking the notion of taxing till numbers is crucial. They have explicitly clarified that such actions are not within their mandate.

The issue of monitoring mobile money transactions for tax purposes has been a topic of interest for KRA. Earlier in January 2023, there were reports indicating their interest in real-time tracking of mobile money transactions to identify potential tax evasion. Specifically, KRA aimed to monitor the Value Added Tax (VAT) on sales and the excise duty charged on transactions.

However, it’s important to note that while KRA may seek to monitor transactions for tax compliance purposes, they clarified that till numbers are not subject to taxation. The caution against fraudsters impersonating KRA for collecting taxes on till numbers or Lipa na Mpesa services remains a crucial warning for Kenyans.

The recent trend highlighted in October 2023 by Business Daily about business owners shifting back to cash transactions due to increased compliance checks is noteworthy. This behavior might stem from concerns about KRA’s intensified efforts to ensure tax compliance, leading some businesses to revert to cash transactions instead of utilizing mobile merchant payment accounts.

The deployment of 1,400 revenue service assistants in September, equipped with paramilitary training, signifies KRA’s serious commitment to enhancing tax compliance, particularly among traders. These efforts include facilitating online business registration and conducting checks that involve inspecting business premises and demanding various documents like business permits, cash and receipt books, mobile money statements, wage schedules, tenancy agreements, rent receipts, and details regarding M-Pesa till and paybill numbers.

While KRA’s efforts are aimed at improving tax compliance, it’s important for both business owners and consumers to be aware of their rights and obligations. Understanding the legitimate requests KRA might make during compliance checks and ensuring proper documentation and adherence to tax regulations are crucial steps to avoid potential misunderstandings or penalties.

Overall, the evolving landscape of tax compliance and monitoring in Kenya, especially concerning mobile money transactions and business operations, warrants attention and careful consideration. Staying informed about legitimate tax obligations and rights as a business owner or consumer is pivotal to navigate these developments effectively.

As this issue progresses, staying updated through credible sources and being vigilant against potential fraudulent activities remain key.