The Kenya Revenue Authority announced it will use financial data from M‑Pesa, specifically till numbers and Pochi La Biashara accounts, to flag undeclared income among micro and small taxpayers.

The disclosure was made to the National Assembly’s Finance and Planning Committee, where KRA presented a mitigation strategy to close widening revenue gaps for the 2026/27 fiscal year.

KRA cited missed domestic VAT and PAYE targets in the first quarter, with VAT collections falling KSh 2.6 billion short of the goal and PAYE collections missing by KSh 7.3 billion.

In parallel, the authority identified a potential KSh 56.1 billion VAT gap among high‑transmission taxpayers, non‑filers and high‑credit taxpayers, who together represent 42 % of the VAT register.

KRA is also in early talks with Safaricom to embed electronic tax invoice generation into M‑Pesa transactions, so that a tax invoice would be automatically produced when a customer pays via a till, paybill or Pochi La Biashara.

The proposed system would allow KRA to cross‑reference the automatically generated invoices with the income figures declared by traders, triggering further scrutiny where large discrepancies appear.

The initiative aims to ease the compliance burden on small traders who struggle with the existing eTIMS requirements while giving the tax authority a reliable data trail to detect under‑reporting.

No definitive implementation timetable has been disclosed; KRA described the Safaricom discussions as ongoing rather than finalised.

Social media reaction has been mixed, with some users welcoming simplified eTIMS compliance and others expressing concern over heightened scrutiny of thin‑margin businesses.

KRA has not yet released guidance on data protection safeguards or the process for notifying traders of any identified discrepancies before enforcement action.