The Kenya Revenue Authority (KRA) will from July seek direct access to mobile money transactions in a bid to catch tax cheats as it hopes to increase its collections by an additional Sh375 billion.
Treasury has disclosed these plans in its budget plans for 2023-2024 saying that KRA’s tax systems will be integrated with those of telecommunications firms which will give it unrestricted access to the bank and mobile money accounts of all taxpayers.
The government wants KRA to collect an additional Sh2.5 trillion in taxes up from Sh2.1 which will represent an extra Sh375 billion headache for the taxman. In order to plug the gap KRA has already said it intends to increase the price of excise stamps on alcohol, juices, cosmetics and cigarettes by four times.
The proposal to gain access to the mobile wallets of Kenyans will according to Treasury help the State meet its ambition of reducing the reliance on borrowing to fund the budget. It seeks to raise Sh743.3 billion in the next fiscal year from the current Sh877.3 billion.
“KRA will implement, among others, the following measures…integration of the KRA tax system with the Telecommunication companies,” said the Treasury.
Treasury argues that the M-Pesa records will help the State identify individuals and firms whose tax payments are not in tandem with the cash moving through their mobile phones. Lawyers have however termed this as an invasion of privacy.
Safaricom which has 55.6 million active lines in 2016 rejected the taxman’s quest to gain unrestricted access to its customers’ mobile money records, citing a lack of legal backing.