Government Taxation to Hit 16 Million M-pesa Users

Safaricom M-PESA - CrossTechValue Added Tax (VAT) - KRA

Government Taxation to Hit 16 Million M-pesa Users

A lot of Kenyan Citizens have been having discussions as to why the government wants to tax their M-pesa money yet they pay taxes.

The government is on the move to get back the economy by minimizing the rate at which the Kenyan Government Borrows money from other countries.

President Ruto after his own research found out that the Kenyans can only set back the economy to stability by appropriately paying taxes. 

The Kenyan Government has ordered KRA to track mobile money transactions in a tax cheats purge. The KRA will be tracking the 16% value-added tax(VAT) on sales as well as the 20% excise duty on airtime.

KRA Data

The Kenyan Government is on a Target of Ksh 3Trillion tax collection in the 2023/2024 budget. There the Ruto government has sought to integrate systems to reform the revenue administration.

This statement was pulled out during the draft 2023 Budget Policy Statement by the treasury. Mobile transactions were started back in 2007 by Safaricom’s former and late CEO Bob Collymore.

Central Bank of Kenya has confirmed that 73.2 Million mobile money accounts were created as of 2022 November. This then amounted to Ksh639.84 billion value of transactions.

Reason for Taxation

Records show that by end of 2021, mobile transactions were more than half the gross domestic product (GDP) of the Kenyan Economy. This has awakened the Ruto Government to link the taxman’s system to give visibility of the real-time money transaction and give a picture of Kenyans’ lifestyle.

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KRA has therefore said that technology shall help them to know people’s earnings and live largely and not pay taxes. This is due to over 80% of the M-pesa mobile transfers being in bulk.

To get a clear picture of this KRA is to match data with all third parties such as betting firms, telcons to capture the cash flow to nab those evading duty payments.

KRA shall foresee that all firms pay taxes on betting, gaming, lottery, and winnings per day by 1 am.

What is your take as a tax payer?

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