KRA Targets M-Pesa Till Numbers and Pochi La Biashara as Taxman Moves to Track Small Business Income

The Kenya Revenue Authority is planning to tighten tax compliance among small businesses by using M-Pesa transaction data to identify traders suspected of underreporting their income.

The proposed measures will cover transactions processed through Safaricom’s M-Pesa business services, including Till Numbers and Pochi La Biashara accounts, as the taxman seeks to increase revenue collection and close existing tax gaps.

According to a report by TUKO.co.ke published on Thursday, October 29, KRA disclosed the plans while presenting strategies to address revenue shortfalls before the National Assembly’s Finance and Planning Committee.

The authority intends to analyse financial transaction records and compare them with income declared by traders in their tax returns. Significant discrepancies could attract further scrutiny from the taxman.

In another development, KRA is holding preliminary discussions with Safaricom on integrating the Electronic Tax Invoice Management System into M-Pesa transactions.

Under the proposed arrangement, electronic tax invoices could be generated automatically when customers pay businesses through Till Numbers, Paybill or Pochi La Biashara.

The integration would allow KRA to compare transaction records with declared business income while helping small traders meet electronic invoicing requirements.

However, the discussions are still ongoing, and no implementation date has been announced.

The proposed changes come after KRA reported revenue shortfalls during the first quarter of the 2026/2027 financial year.

Domestic Value Added Tax collections reached KSh98.2 billion between July and September 2026, falling KSh2.6 billion below the target.

Pay As You Earn collections stood at KSh154.9 billion, missing the target by KSh7.3 billion.

KRA is also pursuing other measures to improve compliance, including matching employer payroll records with third-party information and strengthening monitoring of rental income.

The planned use of M-Pesa data could significantly change how small businesses maintain transaction records and declare their earnings.

While automatic invoicing could simplify compliance, the proposal is also likely to raise questions among traders about financial privacy, data protection and how discrepancies will be handled.

KRA has yet to publish detailed guidance on safeguards or the process businesses would follow if their transaction records differ from declared income.

For now, traders should keep accurate financial records and ensure their tax declarations reflect their actual business activities as discussions between KRA and Safaricom continue.

https://www.tuko.co.ke/business-economy/economy/644905-kra-eyes-safaricoms-m-pesa-numbers-pochi-la-biashara-tax-compliance-measures/?fbclid=IwdGRjcAVP6mljbGNrBU_qMWV4dG4DYWVtAjExAHBkb2YBc3J0YwZhcHBfaWQMMzUwNjg1NTMxNzI4AAEf2ZVKT-YW7_txyQ8vyTpWDBbBYL0qzZg7cbACCU4L9OxnNexAyf33fYWcR-w_aem_fnCTx63Uoo_bvQdx41IyMw

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