New KRA app to allow tax payment through M-Pesa

Workers and businesses can file their returns and pay taxes through their mobile phones after the Kenya Revenue Authority (KRA) launched an app for accessing its services in the race to ease duty payments and boost collection.

The Kenya Revenue Authority (KRA) said the app, dubbed KRA M-Service, that will mainly use M-Pesa is aimed at making tax transactions easier and cut the cost of compliance through removal of intermediaries.

The app will also allow taxpayers to file nil tax returns, Value Added Tax (VAT), payroll tax, excise tax and Monthly Rental Income (MRI).

Firms paying corporate tax are exclude from making payments via the app, a pointer that KRA is seeking to ease payment for small taxpayers like shop keepers, landlords and mini traders given M-Pesa has a daily transaction limits Sh300,000.

“KRA M-Service App will expand the tax base by onboarding the informal sector players who cannot use computers,” said KRA Commissioner for Domestic Taxes Elizabeth Meyo Thursday.

Through the App, taxpayers can also register for Personal Identification Number (PIN) and seek Tax Compliance Certificate (TCC).

The informal sector, also known as Jua Kali, is deemed to have limited contact with the taxation system, save for indirect consumption levies and the Jubilee administration had been banking on turnover taxes to plug revenue loopholes.

This prompted the State reintroduced the sales or turnover tax on one percent of revenues in January to capture Small and Medium Enterprises (SMEs).

The sales tax is expected to provide the KRA, under pressure to collect additional revenue, with a fresh avenue for raising taxes from players this segment, the majority of whom have not been paying State levies.

The small and mid-sized businesses remain the backbone of the Kenyan economy and the largest contributor of new jobs in an economy where big corporates have frozen hiring while some have shed jobs or scaled down operations to protect profits.

Treasury data show that tax collections in the year to June rose a measly 0.92 percent to Sh1.453 trillion compared with Sh1.440 trillion a year earlier.