NAIROBI, Kenya — October 29, 2026
The Kenya Revenue Authority (KRA) is planning to use financial data from M-Pesa Till Numbers and Pochi La Biashara accounts to identify businesses that may be failing to declare their full income for tax purposes.
The proposed measures target commercial transactions processed through mobile money platforms, as the tax authority intensifies efforts to improve compliance and recover revenue following a shortfall in collections.
In a report presented to the National Assembly’s Finance and Planning Committee, KRA outlined plans to compare information from mobile payment channels with taxpayers’ declared income and electronic tax invoice records.
The aim is to identify businesses whose reported sales do not appear consistent with the financial information available to the authority.
The plans could affect small traders, shop owners, online businesses and other entrepreneurs who use mobile money to receive payments from customers.
Why KRA Is Targeting M-Pesa Till Numbers and Pochi La Biashara
Mobile money has become a major payment method for businesses across Kenya, from small retail shops and market traders to online sellers and service providers.
KRA now intends to use information from these transactions to help identify commercial income that may not have been included in tax returns.
According to a report by Kenyans.co.ke published on October 28, the authority wants to cross-check financial data from Till Numbers and Pochi La Biashara against taxpayer declarations.
The proposed approach would help identify non-filers, businesses that understate their sales and taxpayers whose reported figures differ from information recorded through electronic invoicing systems.
KRA has also identified potential additional domestic Value Added Tax (VAT) revenue from taxpayers whose records require further verification.
However, a discrepancy in financial records does not automatically prove tax evasion. Businesses may be asked to explain differences before the authority determines whether additional tax is payable.
KRA Responds to Revenue Collection Shortfall
The planned checks come after KRA collected KSh2.844 trillion in ordinary revenue during the 2025/2026 financial year, against a target of KSh2.977 trillion.
The shortfall was approximately KSh132.1 billion, according to figures presented to lawmakers.
The authority is pursuing several measures to improve collections, including closer scrutiny of payroll records, digital transactions and outstanding tax liabilities.
For domestic VAT, KRA plans to focus on taxpayers whose electronic tax invoice information differs from their returns, those who fail to file returns and cases involving substantial VAT credit balances.
The authority has identified potential revenue from micro and small taxpayers that it intends to pursue through targeted compliance measures.
The mobile-money initiative forms part of this broader strategy to improve the accuracy of tax declarations and expand compliance.
Will KRA Tax Every M-Pesa Transaction?
The proposed scrutiny does not mean every M-Pesa transaction automatically becomes taxable income.
The important distinction is between money received as payment for taxable business activity and money transferred for other purposes.
For example, a payment received by a shop owner for goods sold is different from a personal transfer between family members, a loan repayment or money moved between a person’s own accounts.
Such transactions may require different tax treatment depending on their purpose and the circumstances involved.
KRA’s stated focus in the latest plan is on identifying undeclared commercial income and discrepancies in business tax records.
Taxpayers should therefore keep records that clearly explain the source and purpose of significant transactions, particularly where personal and business finances use the same payment account.
What This Means for Small Businesses
Traders who receive customer payments through Till Numbers or Pochi La Biashara should ensure their financial records accurately reflect their business activities.
A business that receives substantial payments but declares significantly lower sales may attract questions if the figures do not reconcile with other available information.
Business owners can prepare by taking the following steps:
- Keep accurate sales records: Record daily sales and ensure they correspond with actual business activity.
- Reconcile M-Pesa payments: Compare Till Number and Pochi La Biashara receipts against sales records and bank deposits.
- Maintain electronic invoices: Issue the required eTIMS-compliant invoices and retain supporting purchase documentation.
- File accurate tax returns: Ensure declared income reflects the applicable tax rules and the business’s actual activities.
- Separate personal and business transactions where practical: This makes it easier to explain payments that are not business income.
- Retain supporting documents: Keep records of loans, refunds, transfers and other transactions that may otherwise appear similar to business receipts.
These measures can help businesses respond to questions from KRA and identify errors in their own records before filing returns.
KRA Is Also Increasing Scrutiny of Payrolls
The mobile-money initiative is not the only compliance measure outlined by the authority.
KRA also plans to compare employer payroll information with third-party records to identify possible gaps in Pay As You Earn (PAYE) deductions and remittances.
Employers with large workforces but unusually low or missing statutory deductions may face further scrutiny.
The authority also intends to use information from government payments to pursue outstanding tax liabilities owed by businesses and contractors.
These measures reflect a wider move towards data-driven tax administration, in which records from different systems are compared to identify potential inconsistencies.
What Taxpayers Should Know
The planned use of mobile-money data highlights the importance of maintaining accurate financial records as digital tax verification expands.
For business owners, the key issue is whether payments received, invoices issued and income declared can be properly reconciled.
A high volume of transactions alone does not establish that tax has been evaded. The nature of the transactions, the applicable tax rules and the supporting documentation all matter.
Taxpayers who are uncertain about how particular receipts should be treated should consult KRA’s official guidance or a qualified tax professional.
As the authority pursues its revenue targets, businesses that rely on mobile money should pay close attention to their bookkeeping, invoicing and tax-filing obligations.
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