The Kenya Revenue Authority is intensifying efforts to match mobile money transactions with tax declarations, targeting individuals who file nil returns despite evident financial activity.
Starting 1 April the Kenya Revenue Authority will roll out pre-filled tax returns pulling data from mobile wallets like M-Pesa, requiring filers to verify or explain mismatches by 30 June for the 2026 tax year.
The move aims to tackle underreporting in Kenya’s informal sector, where small digital payments are common, while still allowing nil returns.
Online reactions highlight double standards, with users pointing to eCitizen scandals involving billions in mismanagement and joking about returning to cash under the mattress.
New approach
Speaking on 25 March during a Creative Engagement on Fiscal Justice with the Youth and Media, FCPA Maurice Oray, deputy commissioner in the Policy and Tax Division, revealed that the Kenya Revenue Authority is ramping up efforts to monitor all sources of income after observing a trend among sections of Kenyans who file nil returns.
According to Oray, the monitoring now includes transactions conducted on mobile money platforms, noting that the authority already holds significant financial data on taxpayers and will increasingly use this information to verify declarations.
“As you file nil returns, KRA has information and details about your financial activities. We are not stopping you from filing nil returns, but we will inform you of transactions you made, especially through mobile money,” Oray stated.
Under the new approach, the Kenya Revenue Authority will introduce pre-filled tax returns, where known income streams will already be captured in the system.
Taxpayers will then be required to confirm whether the information is accurate or provide an explanation if they dispute the figures indicated.
“If you agree with the pre-filled data, the process moves forward seamlessly. But if you say no, you must justify the discrepancy,” he added, pointing to tighter compliance measures for individuals declaring zero income despite recorded transactions.
Public reactions and broader context
Oray further disclosed that starting this year the Kenya Revenue Authority intends to track all income streams more comprehensively as part of wider reforms aimed at simplifying tax filing while enhancing accountability and reducing tax evasion.
This also comes at a time when the taxman had initially closed the nil payment option to validate and realign its systems.
The deputy commissioner also encouraged the public to file their returns in time and dismissed concerns that the nil returns option is not functional.
“We are not stopping you from filing nil returns, but we will flag transactions you have made, especially via mobile money,” he said.
Taxpayers are advised to log into their iTax accounts regularly, cross-check records, and consult professionals if discrepancies arise. For official guidance, visit the KRA website.
The initiative reflects Kenya’s ongoing digital transformation in revenue collection, balancing ease of compliance with the need for fairness across all sectors.
