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Kenyan Government Seeks Legal Backing to Monitor Mobile Money Transactions for Tax Evasion

The Kenyan government is proposing to amend the Data Protection Act to allow the Kenya Revenue Authority (KRA) to access and analyze bank and mobile money transaction data, including M-Pesa accounts, in order to identify potential tax discrepancies and catch tax evaders.

Image Courtesy: Standard.

This controversial plan is part of President William Ruto’s strategy to broaden the country’s tax base and raise revenue, as the KRA has been missing its targets in recent years. The KRA intends to integrate its tax system with telecommunication companies to gain unfettered access to customer transaction data.

However, the proposal has drawn heavy criticism from consumer rights groups like the Consumer Federation of Kenya (COFEK), who argue it violates consumer privacy rights guaranteed by the constitution and consumer protection laws. There are concerns it could force people to revert to using cash instead of mobile money.

The KRA believes monitoring the hugely popular M-Pesa platform, which accounts for nearly all mobile money transactions in Kenya, will provide a treasure trove of financial data to help identify individuals and businesses whose tax payments do not match their spending on assets like real estate and luxury vehicles.
The government is seeking to increase tax revenue to KES 3 trillion ($24.2 billion) in the next fiscal year to fund its ambitious budget plans. But the plan to allow the KRA to access sensitive personal data without a court order has been described as “worrying” by legal experts.

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Safaricom’s M-Pesa Monthly Standing Orders: Streamlining Recurring Payments

The much-anticipated feature is now a reality as Safaricom introduces M-Pesa Monthly Standing Orders to make managing recurring payments a breeze. This innovation, known as M-subscriptions, is poised to simplify the lives of Kenyan consumers who often grapple with the task of remembering and organizing their monthly financial obligations.

 

M-subscriptions, designed and proposed by Safaricom’s engineering team, has been seamlessly integrated into the M-PESA app. With this new feature, customers can effortlessly manage their recurring transactions, such as sending money to family and friends, paying regular bills, or purchasing goods and services.

 

Getting started with M-subscriptions is a straightforward process:

  • Review and Accept Terms and Conditions: The journey begins with customers reviewing and accepting the terms and conditions associated with the service. This step ensures transparency and establishes the guidelines for using standing orders.
  • Opting In with M-PESA PIN: Customers can then opt into the service by using their M-PESA PIN, providing a layer of security and verification.
  • Selecting the Desired Standing Orders: After opting in, customers have the flexibility to choose which standing orders they wish to set up. Whether it’s for sending money to family and friends, paying utility bills, or making regular purchases, the options are wide-ranging.

 

For instance, to create a standing order for money transfers, customers can specify:

Recipient’s Details:Set up the recipient’s name to ensure seamless transactions.

Transaction Amount: Define the amount to be sent during each scheduled transaction.

Frequency: Specify how often the transfers should occur. This can range from daily, weekly, or monthly intervals.

The beauty of this system is that it can be fully automated. If customers prefer not to worry about initiating each payment, the platform will deduct the necessary funds at the scheduled time, ensuring that payments are made promptly.

 

However, it’s important to note that automatic deductions will only occur when customers explicitly configure this feature. This puts the power in the hands of users, allowing them to maintain full control over their financial transactions.

With M-subscriptions, Safaricom has taken a significant step toward enhancing the convenience and ease of managing recurring payments. This innovation aligns perfectly with Safaricom’s mission to provide accessible and intuitive services to its customers, making M-Pesa an even more indispensable tool in the lives of Kenyan consumers. The launch of M-Pesa Monthly Standing Orders marks a new chapter in the evolution of mobile money services in Kenya, further solidifying M-Pesa’s position as a groundbreaking financial platform.