By the 254.ke Newsroom
The Kenya Revenue Authority (KRA) and Safaricom have begun preliminary discussions on a plan under which M-Pesa would generate electronic tax invoices for small traders and send them to KRA, a KRA official told MPs this week. No agreement, pilot or start date has been announced, and neither company has put out a public statement, according to the reports reviewed on November 4, 2026.
What is the KRA and Safaricom M-Pesa tax invoicing proposal?
The idea is a form of reverse invoicing. Instead of a small trader issuing an eTIMS invoice for each sale, Safaricom would produce the invoice from payments received through M-Pesa tills, paybills and other merchant channels, and transmit it to KRA. Reports describe sending the data in a batch at the end of the day, a model KRA already uses with supermarkets. TechTrendsKE calls end-of-day transmission “one possible approach,” so the exact mechanism is not settled.
The official spoke to the National Assembly’s Finance and National Planning Committee on Tuesday, October 27, according to Nairobi Business Monthly. Business Daily carried the first report on October 28, with The Star, TechTrendsKE, Kenya Today and Nairobi Business Monthly following on October 29. The outlets share the same committee details, so they should be read as one account rather than five independent confirmations.
Key facts at a glance
| Item | What reports say |
|---|---|
| Who is talking | KRA and Safaricom, described as “preliminary” or early-stage discussions |
| Source of the claim | An unnamed KRA official, speaking to the Finance and National Planning Committee |
| Proposed tool | eTIMS e-invoices generated from M-Pesa merchant payments |
| Target group | Micro and small traders, and small suppliers to large companies |
| Merchant base | About 3.1 million merchants in the year to March 2026, up 71.4% from 1.8 million |
| Of which | About 2.1 million Pochi la Biashara users and about 1 million Lipa na M-Pesa till or paybill merchants |
| Threshold mentioned | Sh5 million annual sales |
| Launch date | None announced |
Who would be affected, and what is the Sh5 million line?
The Star and Nairobi Business Monthly both note that businesses with annual sales below Sh5 million generally fall outside the main income tax and compulsory VAT thresholds, but may still be required to issue e-invoices when they sell to larger firms. The reports do not say whether the Sh5 million figure would define who is covered by an M-Pesa invoicing scheme. That detail has not been confirmed.
TechTrendsKE and Kenya Today add that KRA wants to use till and Pochi data to spot income that is not declared in returns. The Star and Nairobi Business Monthly do not mention this, so it rests on two outlets.
Why is KRA looking at M-Pesa?
The scale of mobile payments is the draw. TechTrendsKE reports domestic VAT collection of Sh98.2 billion for July to September 2026, about Sh2.6 billion short of target, and links part of the gap to smaller taxpayers. Safaricom has separately reported that M-Pesa handled Sh41.68 trillion in transactions over a year, according to Business Today. For a revenue authority trying to widen the tax base without adding paperwork, payment data that already exists is an obvious place to look.
What is not confirmed?
- Whether any agreement, memorandum or pilot exists.
- Whether the service would be mandatory or optional for traders.
- Any legal basis, fee, or technical design from Safaricom.
- Any official statement from KRA or Safaricom outside the committee session.
- Whether turnover tax is in scope. None of the reports mention it.
Business Daily’s full article could not be read in full, so its detail beyond the opening paragraphs is not reflected here.
Frequently asked questions
Will M-Pesa start issuing tax invoices automatically?
Not yet. The reports describe early talks only, with no launch date, pilot or signed agreement.
What is eTIMS?
It is KRA’s electronic tax invoice management system, used to issue and record tax invoices. See the KRA website for the official guidance.
What is reverse invoicing?
It is when the buyer, not the seller, issues the invoice. KRA already uses it where large buyers raise eTIMS invoices for small suppliers.
Do small traders have to do anything now?
Nothing new has been announced. Traders who sell to larger companies may already be asked for eTIMS invoices under existing rules.
Related coverage
See our earlier reports on what is live on M-Pesa now, the PAYE relief and tax-free threshold, and the draft 2027/28 budget.
