KRA Explains Which M-Pesa Transactions Are Monitored for Tax Compliance
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The Kenya Revenue Authority (KRA) has assured Kenyans that it is not interested in monitoring personal M-Pesa transactions between family members, friends, or relatives.
Speaking during the Meru Citizen Assembly on Thursday, May 7, 2026, KRA Commissioner for Micro and Small Taxpayers George Obell said the tax authority is only focusing on business-related mobile money transactions.
According to Obell, normal person-to-person transfers are not part of KRA’s tax compliance system because they are not commercial activities.
He explained that the authority is mainly targeting payments made through business channels such as PayBill numbers and Till numbers.
“It is important for Kenyans to understand that KRA is not interested in personal transactions like sending money to friends, relatives, or family members,” Obell said.
His remarks came after many Kenyans raised concerns over reports that KRA plans to connect tax systems with mobile money platforms such as M-Pesa.
KRA Introduces Virtual ETR System
KRA also revealed that it is developing a new system known as the Virtual Electronic Tax Register (Virtual ETR).
The system is expected to help businesses issue electronic tax invoices automatically whenever they receive payments through digital platforms.
Obell said the new platform will mainly support businesses operating online or receiving payments digitally.
“The solution will help businesses generate electronic tax invoices immediately after receiving payment,” he explained.
Focus on Business Transactions
KRA insisted that the new system is meant to improve tax compliance among businesses and not to spy on private financial activities of Kenyans.
The authority clarified that non-business transfers between individuals will not be taxed or monitored under the proposed system.
The clarification comes after growing public debate online, where many Kenyans expressed fears about privacy and possible government access to personal financial data.
Some people were worried that integrating tax systems with mobile money services could lead to monitoring of all personal transactions.
However, KRA has maintained that its main focus is on formal business activities and taxable commercial transactions.
Government Push for Digital Tax Systems
The planned changes are part of the government’s wider efforts to modernise tax collection systems and improve compliance among small and medium businesses using digital payment methods.
Earlier in March 2026, KRA announced that it would increase monitoring of mobile money transactions in an effort to catch individuals filing nil returns despite showing active financial transactions.
Speaking during a discussion on fiscal justice with youth and media stakeholders, KRA Deputy Commissioner Maurice Oray said the authority would monitor different income sources to confirm whether taxpayers are declaring correct information.
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He noted that KRA already has access to a large amount of financial data and plans to use it more effectively in tax verification processes.
