The Kenya Revenue Authority will begin cross-checking mobile money transactions against nil tax returns in a new compliance push targeting underreported income across the country.
Starting 1 April 2026, the tax authority will roll out a pre-filled tax return system integrating financial data from mobile money platforms such as M-Pesa. Taxpayers will be required to review the auto-generated data and confirm its accuracy or explain any discrepancies before the 30 June 2026 deadline.
Speaking on 25 March during a Creative Engagement on Fiscal Justice with the Youth and Media, Deputy Commissioner Maurice Oray said the authority is increasing scrutiny of taxpayers who declare nil returns despite active financial transactions.
“As you file nil returns, KRA has information and details about your financial activities,” Oray said. “We are not stopping you from filing nil returns, but we will inform you of transactions you made, especially through mobile money.”
The authority said it already holds significant financial data and will now use it more actively to validate income declarations.
Under the new system, known income streams will be pre-filled in tax returns, requiring taxpayers to either agree with the data or provide justification for any differences.
Pre-filled returns target tax evasion
KRA said the move is part of broader reforms aimed at simplifying tax filing while improving accountability and reducing tax evasion, particularly within Kenya’s informal sector where mobile money transactions are widespread.
“If you agree with the pre-filled data, the process moves forward seamlessly. But if you say no, you must justify the discrepancy,” Oray said.
The authority clarified that filing nil returns will remain an option, but with increased verification measures to ensure accuracy. This follows an earlier system review that temporarily affected nil return submissions.
KRA added that it plans to track income streams more comprehensively as part of ongoing efforts to widen the tax base.
The announcement has sparked debate among Kenyans online, with some questioning the fairness of stricter enforcement on individuals while raising concerns about accountability in public finance management.
Others reacted humorously, suggesting a shift back to cash transactions to avoid scrutiny, reflecting broader public sentiment around increased monitoring.
KRA, however, maintained that the reforms are necessary to ensure fairness in taxation and improve compliance across all sectors.
Taxpayers have been urged to review their financial records and file returns before the 30 June 2026 deadline to avoid penalties.
