A mama mboga in Kawangware sells tomatoes. A customer pays KES 200 via Lipa na M-Pesa. Under what KRA is now building, that buzz on her phone is no longer just a payment notification. It is a tax event. An invoice is generated, a Payment Registration Number issued, and a VAT obligation attached, all before she has handed over anything.
That is the world the Kenya Revenue Authority is constructing by tying its electronic Tax Invoice Management System directly into M-Pesa. Commissioner for Micro and Small Taxpayers George Obell calls it efficiency. He projects a 16 per cent jump in general tax compliance. The pitch sounds reasonable. The history makes it harder to swallow.
In 2016, Treasury attempted to amend the Tax Procedures Act to give KRA direct, ongoing access to M-Pesa records without court orders. Safaricom resisted publicly, citing the Constitution and the National Payment Systems Act, and the planned access never operationalised. In 2024, Treasury tried again, proposing to amend the Data Protection Act through the Finance Bill to exempt KRA from privacy protections. That bill was withdrawn after the Gen Z protests. Twice the architecture has been blocked. Now the same destination is being reached through invoicing infrastructure rather than legislation, a route that does not require Parliament’s permission because it was not framed as a privacy question in the first place.
The behavioural effect of that surveillance is not theoretical. Caroline Rotich, then KRA’s chief manager in Domestic Taxes, publicly admitted at a Media Lab session in Nairobi in October 2023 that businesses were closing their Lipa na M-Pesa, Buy Goods, and Pochi La Biashara accounts after KRA deployed 1,400 Revenue Service Assistants for compliance checks. Her response was not to ask why. Rather, it was to find ways, including mentioning partnership with Safaricom to track the businesses that opted out. That tells you something about whose convenience this system is being built for.
There is a deeper analytical problem. M-Pesa moved KES 38.29 trillion in FY2025 according to Safaricom’s own annual report — more than twice Kenya’s nominal GDP of KES 16.22 trillion in 2024. But moving money is not the same as earning it. A tailor receiving KES 300,000 a month in M-Pesa pays for fabric, electricity, rent, and an apprentice before anything is left. A real-time tax-at-source system sees the gross figure, not the margin. KRA has separately proposed scrapping the KES 5 million VAT threshold entirely, which would pull every kiosk and freelancer into a VAT regime designed for businesses with finance departments. The conflation of revenue and profit is not a rounding error. It is the architecture.
Then there is the small matter of whether any of this will work. This is the same iTax that crashed on the final day of the 2025 filing deadline, forcing two extensions. The same KRA that halted NIL filings entirely for weeks earlier this year while reconciling eTIMS data. The new system targets 99.8 per cent uptime, an aspiration that quietly admits the previous one did not get there. Building real-time fiscal infrastructure on top of this track record is not a technology problem. It is a credibility problem.
The hardest question sits underneath everything: what is this for? KRA crossed KES 2 trillion in collections in nine months of FY2025/26. Hospitals still run out of paracetamol. Garbage piles up in Eastleigh. The roads in Kibra are what they were a decade ago. A tax system that watches every shilling you receive is a contract — visibility in exchange for service. Right now, only one side of that contract is being built. The mama mboga’s phone is about to start talking to KRA. Nobody has explained when KRA starts talking back.
