The Kenya Revenue Authority (KRA) has flagged a growing number of business owners ditching mobile merchant payment accounts and reverting to cash transactions since it enhanced compliance checks in major towns last month.
The taxman said it has noted a trend where businesses, which used to get payments through Lipa Na M-Pesa Buy Goods Till numbers, are now asking customers to pay cash.
This comes a month after the KRA deployed some 1,400 revenue service assistants with paramilitary training to help enhance tax compliance amongst traders, including the facilitation of online registration of businesses.
“It is already noted that [closure of Lipa Na M-Pesa merchant accounts] is what is happening in the market. We are working on strategies on how we can work around this,” Caroline Rotich, the KRA’s chief manager in the Domestic Taxes Department, said on Tuesday.
The KRA said it will be seeking information from Safaricom on merchants who have opted out of the M-Pesa Buy Goods and Pochi La Biashara tills in a bid to catch tax cheats.
Safaricom's Lipa Na M-Pesa Buy Goods Till has been popular amongst small traders in recent years as it enables them to collect payments on their till and use the same cash to settle bills such as wages and commissions to employees.
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