Mounting pressure from the Kenya Revenue Authority (KRA) is creating widespread anxiety among compliant taxpayers, even as authorities struggle to bring millions of non-filers into the tax net.
The tension follows Parliament’s recent rejection of a contentious Finance Bill clause that would have granted KRA access to personal mobile money and bank transaction data.
KRA Chairperson Ndiritu Muriithi revealed stark compliance gaps at a mid-June forum: Of 20 million Kenyans registered with KRA PINs, only 10 million file tax returns annually. Within this group, 6 million declare zero taxable income. This leaves approximately 16 million potential taxpayers outside the system, forcing KRA to intensify scrutiny on existing filers.
“The compliant few keep paying for the many,” observed corporate governance specialist Carol Musyoka, echoing widespread sentiment. “Receiving a KRA message triggers instant panic, even when you know your taxes are current.” Her experience mirrors numerous taxpayer accounts of KRA communications causing disproportionate stress.
The rollout of KRA’s electronic Tax Invoice Management System (eTIMS) has faced significant pushback. Many small suppliers refuse to issue eTIMS invoices to avoid formalizing transactions, forcing businesses to choose between losing suppliers or risking disallowed expense claims. “I’ve lost suppliers who prefer staying under the radar,” Musyoka noted.
Hiring practices now prioritize tax dispute experience. Interviews for accounting roles increasingly focus on navigating KRA audits rather than core accounting standards. “Tax accounting errors are as dangerous as reckless motorcycle travel,” one industry professional stated, reflecting the high stakes of KRA engagements.
According to OECD figures, Kenya ranks fourth in Africa for tax revenue contribution to government coffers at 50 percent of total revenue. This trails Tunisia (80 percent), South Africa (70 percent), and Morocco (65 percent). KRA views this gap as evidence of untapped potential.
“There’s still room to expand the tax base,” Muriithi asserted, questioning: “Where are these 16 million Kenyans? If they’re economically inactive, how can we bring them into the revenue system?” The withdrawn Finance Bill clause aimed to address this through enhanced financial surveillance.
Tax professionals report surging demand for dispute resolution services. The Institute of Certified Public Accountants of Kenya (ICPAK) has expanded KRA negotiation training, while the Kenya Institute of Management notes a 40 percent increase in tax compliance seminars since January 2025.
KRA maintains its enforcement focus is necessary to fund national development. “Broadening the base remains our priority,” Commissioner General Humphrey Wattanga stated in a June press briefing. Meanwhile, compliant taxpayers brace for heightened scrutiny as the June 30 penalty waiver deadline passes.
– By Nusurah Nuhu
