![Moses Kuria's Bold Plan To Collect Taxes From Kenyans Through Paybills [VIDEO]](https://i0.wp.com/bouncenationkenya.com/wp-content/uploads/2024/10/Moses-Kurias-Bold-Plan-To-Collect-Taxes-From-Kenyans-Through.jpg?fit=870%2C580&ssl=1 "Moses Kuria's Bold Plan To Collect Taxes From Kenyans Through")
He argued that the collection of taxes had been heavily concentrated on the formal sector, stating that the informal sector had more people earning incomes through a variety of businesses.
In a move that could spark fresh economic confrontations between Kenyans and the government, State House Senior Advisor Moses Kuria on Wednesday, October 10 boldly declared that all pay bills and till numbers will be integrated with the Kenya Revenue Authority (KRA) to step up tax collection.
Kuria, who spoke during a tax summit, revealed that the integration will be done by December 25, 2024, a move that will see all paybills declared as virtual electronic tax receipts in fresh efforts to widen the tax base.
“Come Christmas 2024, all pay bills will also be Virtual Electronic Tax Receipts (ETR) for purposes of KRA,” he announced. According to his remarks, transactions on mobile money payments of traders will be nearly similar to an electronic tax invoice management system (eTIMS) receipt and a basis for tax computation.
He argued that the collection of taxes had been heavily concentrated on the formal sector, stating that the informal sector had more people earning incomes through a variety of businesses.
Come Christmas 2024, all paybills will also be virtual ETRs for the purposes of tax collection- Moses Kuria#ViralVideos pic.twitter.com/dG3NlPO6jh
— Viral Tea Ke (@ViralTeaKe) October 10, 2024
Kuria did admit that his proposal would attract heavy resistance but maintained that the government was keen on fully implementing the programme.
“I know there is going to be some noise but I also want someone to tell me where we agreed that someone should not pay taxes. Maybe I missed that memo.
“As far as I know, paying taxes is within our constitution and our law. When those people come to our tax bracket maybe those 3 million people (in the formal sector), we will be able to lower the income taxes for them,” he asserted.
Kuria pointed at the disparity between the estimated 200,000 firms that have ETRs and the two million that use paybills as their digital payment points across the country.
“Today at KRA, the number of people who have devices for VAT, the ETR devices, is only 200,000. Combined, all our telcos and the banks doing mobile payments have what we call digital touch points for payments- two million of them, that’s 10 times the number of ETRs at KRA and speaks to the huge opportunity we have in digitising our revenue framework,” he added.
The former Cabinet Secretary did not give more details on the plan, but President William Ruto has previously said the tens of millions of mobile money accounts in Kenya offered a chance to boost revenue.
As a start, this will target firms that generate over Ksh5 million in annual sales, a pointer that it is targeting traders in the informal sector who are outside the ambit of the KRA.
However, there lies an issue as implementing such a directive would worsen the cost of doing business in the country and businesses would be forced to abandon the paybill transactions and force Kenyans to make payments in cash to avert additional costs.
The ETR is a cash register with fiscal memory that keeps a record of all transactions for purposes of the trader accounting for VAT charged at the time of making a sale, which is monitored in real-time by the taxman.
Any person or business supplying or expecting to supply taxable goods or services with a value of Ksh5 million or more in a year is required to register for VAT. Further, every VAT-registered taxpayer is also required to be listed under the eTIMS.
Kenya Revenue Authority (KRA) offices at Times Tower, Nairobi. /FILE