Analysts predict that businesses will start making cash payments since the government does not intend to tax pay bills.
After President Moses Kuria’s announcement that taxes would be collected on payments made via mobile payment platforms like PayBill and Till numbers, small and medium-sized businesses are probably going to be reluctant to use these services.
Analysts caution that this action may raise expenses for both consumers and companies, thus impeding the expansion of the ecosystem for digital payments. Kuria said, “Please whisper to all those PayBills that by Christmas 2024, all those PayBills will also be virtual ETRs for KRA purposes.”
Although I am aware that there will be commotion, where did we decide that someone would not be paying taxes?
Due to the fact that SMEs primarily rely on these platforms for transactions, worries regarding Kuria’s proposal have been raised. Although millions of Kenyans benefit from the efficiency, accessibility, and financial inclusion that mobile payments provide, experts warn that this kind of action might backfire.
“If you attempt to use the platform of PayBills and Till numbers to collect revenue, what will happen is a lot would move away from these digital platforms and revert to cash or black economy,” stated Victor Otieno, Managing Director of Viffa Consult.
According to IC Group economist Churchill Ogutu, this plan is more of a monitoring tool to find untaxed market segments.
At the most recent KRA summit, Kuria disclosed this information and declared that by December 25 of this year, the government would turn mobile money PaybBll and Till numbers into Electronic Tax Registers (ETRs).
He said that the plan intends to increase revenue and end tax evasion. “In terms of income taxes, the three million formal sector contributes Ksh. 500 billion.” The 16 million working in the unorganized sector only make up Ksh. 12 billion.
It’s a social issue, not an economic one, in my opinion. We have determined that at zero option, there will be nowhere for anyone to hide,” Kuria continued. Otieno, on the other hand, disputes this, stating that “they are not tax evaders; rather, it is the system that prevents them from growing to become medium-sized businesses.”
At the most recent KRA summit, Kuria disclosed this information and declared that by December 25 of this year, the government would turn mobile money PaybBll and Till numbers into Electronic Tax Registers (ETRs). He said that the plan intends to increase revenue and end tax evasion. “In terms of income taxes, the three million formal sector contributes Ksh. 500 billion.” The 16 million working in the unorganized sector only make up Ksh. 12 billion. It’s a social issue, not an economic one, in my opinion.
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