Category: Business Daily

The Kenya Revenue Authority (KRA) has heightened tax administrative measures to enhance compliance and broaden the tax base. The move primarily focuses on micro, small, and medium-sized enterprises, commonly referred to as MSMEs.

The informal sector, which largely comprises MSMEs, is the largest contributor of employment opportunities in Kenya, according to the Economic Survey, 2025. They also make a sizeable contribution to the GDP.

There has, however, been concern that, despite MSMEs being key drivers of the economy, their direct contribution to the tax kitty has fallen below expectations. This has been attributed to, among other factors, low awareness and the complexity of tax laws. The KRA has rolled out various programmes to enhance taxpayer education and awareness. This is in addition to substantial investment in technology to simplify and reduce the cost of compliance, which is expected to promote voluntary compliance.

It is also notable that KRA has heightened the level of compliance audits or reviews on MSMEs. This is enabled by the use of data analytics and other advanced methods that help in identifying compliance gaps.

The automation of tax return filing and payment has greatly reduced manual review and analysis of taxpayers’ financial records, which has enhanced efficiency, freeing up capacity that was hitherto consumed in manual review of documents.

Another high-impact administrative measure rolled out by KRA is eTIMS, which ensures taxpayers digitally capture their transactions and in a real-time basis, relay the data to the KRA.

The enactment of a legal requirement that all invoices must be issued through eTIMS or a TIMS-compliant device has provided KRA visibility of taxpayers’ transactions. The initial implementation stages faced challenges as taxpayers adjusted their operations and updated their systems.

Effective 1 January 2026, the KRA has issued a public notice indicating that all income and expenses declared in tax returns will be digitally validated against eTIMS and customs data.

This is likely to face challenges, particularly for late adopters of eTIMS requirements.

There has been a notable increase in tax compliance audits on MSMEs based on the number of tax appeals filed at the Tax Appeals Tribunal (TAT). A worrying trend has, however, been the number of appeals that taxpayers have lost due to failure to meet the requirements of lodging an appeal at the TAT.

A substantial number of appeals have also been lost by taxpayers due to the late filing of appeals, among other legal and procedural technicalities.

Unfortunately, defects in tax appeals leave the Tribunal with no option but to make a judgment focused on administrative aspects as opposed to a review of the technical merits of the appeal.

These gaps are contributed by a myriad of reasons, including limited knowledge on tax disputes requirements by the affected taxpayers or representation by persons who do not possess the requisite knowledge and experience in handling tax matters. As such, effective dispute resolution remains core in ensuring fairness in taxation.

The Tax Appeals Tribunal Act defines a tax agent as a person who acts on behalf of another person on matters relating to tax and is registered as such by KRA. The Act further states that for hearing of proceedings before the Tribunal, the appellant may appear in person or be represented by a tax agent or by an advocate of the High Court of Kenya.

Failure to have a Tax Agents Committee that vets and approves tax agents has been a setback in ensuring only licensed tax agents represent taxpayers. This has had an adverse impact, more so for MSMEs who at times rely on persons who are not qualified to handle tax matters when objecting at the TAT.

The Tax Procedures Act (TPA) provides that a person, other than a tax agent, shall not represent another person as that other person’s tax agent or offer assistance to another person for a reward in respect of that other person’s rights or obligations under a tax law. The restriction, however, excludes legal practitioners acting in the ordinary course of their profession.

The TPA provides that the functions of a tax agent include, but are not limited to, preparing and submitting tax returns on behalf of a taxpayer; liaising with the KRA on behalf of a taxpayer on matters relating to tax; or advising and representing a taxpayer in tax matters before the Tribunal.

An advocate of the High Court acting in the ordinary course of the advocate’s profession is not required to register as a tax agent to perform the highlighted functions.

It is the responsibility of the Treasury CS, by notice in the Gazette, to appoint a Tax Agents’ Committee. It is important that the committee is put in place as soon as possible to close this gap. Having qualified and licensed tax agents will ensure all taxpayers have a fair chance of submitting valid and timely objections and appeals to the KRA and the TAT respectively in case of a tax dispute.

What would happen if more people in the informal economy had access to the tools they needed to earn a stable income? The answer, is not merely individual benefit. It is an economic transformation.

Today, millions of people rely on motorcycles, tuk-tuks and smartphones to participate in the fast-growing digital and service economies. These assets enable transportation of people and goods, facilitate payments and logistics, and connect entrepreneurs to customers, suppliers and opportunities.

Yet for a very long time, access to such assets was limited to those who could meet strict, formal credit requirements. These criteria excluded the majority of working people.

Entrepreneurship in these markets is rarely optional. It is how families pay school fees, build houses and support communities. It is work rooted not in risk, but in resilience.

It is clear that owning an income-generating asset, such as a motorcycle or smartphone can provide a more powerful and immediate uplift in earnings, compared to receiving a small loan.

In both mobility and connectivity, the principle remains the same: access to the right tools unlocks the ability to earn, to plan and to progress.

But scale has also brought lessons. Financial inclusion is only meaningful when the outcomes are positive and enduring. The broader economic landscape is shifting, too. Across Africa and emerging markets globally, three transitions are redefining how people work and move.

First, the transportation sector is gradually electrifying. Electric two-wheelers and three-wheelers offer lower operating costs, more predictable margins and environmental benefits, provided they are supported with the right infrastructure and financing models.

Second, payments are becoming increasingly digital. Mobile money ecosystems are not only facilitating transactions. They are generating valuable economic visibility and creating credit pathways where none existed before.

Third, informal work is gaining structure. Through technology, gig platforms and digital identity, workers who were once invisible to financial systems are becoming legible and therefore financeable.

These transitions represent a fundamental shift in how economic participation operates. They come with a clear challenge: systems must keep pace with the speed of the people who rely on them.

Looking ahead to the next decade, the focus must therefore move from broadening access to accelerating upward mobility.

The questions we now ask ourselves include: How do we help customers advance from their first asset to their second, and eventually toward business expansion? How do we use data to help them anticipate income shocks before they occur?

How do we collaborate with regulators, manufacturers and development partners to ensure that new technologies, such as electric mobility, translate into real economic benefits?

These are not abstract concerns. They represent the next frontier of financial inclusion, where access is paired with long-term capability and where short-term opportunity evolves into sustainable progress.

Equity Bank Kenya is in advanced stages of securing a Sh7.7 billion ($60 million) trade finance guarantee facility from the African Development Bank (AfDB) to support its facilitation of small companies engaged in import and export through letters of credit.

The continental lender said approval for the proposed facility is expected before the end of the month, a move that will help derisk Equity Bank’s international trade facilitation, particularly to smaller businesses.

Facebook is quietly testing a system that limits how many links some users can share each month, signalling a significant shift in how content is distributed on the global platform, including by Kenyans.

Facebook parent firm Meta says the trial affects users in ‘Professional Mode’ and Pages, allowing only two external links per month for those without a paid Meta Verified subscription.

Kenya risks nationwide power blackouts after bank accounts belonging to the Kenya Electricity Transmission Company (Ketraco) were frozen in the wake of a Sh10 billion row, leaving the utility with no cash for repairs and maintenance.

In an urgent application filed at the High Court, Ketraco warned that the freezing of its 17 bank accounts has severely disrupted its operations, including the maintenance of electricity transmission lines, raising the possibility of widespread power outages across the country.

Over the past five years, what has sustained Kenya Airways (KQ) through stormy skies has been the uninterrupted stream of hope flowing from its C-suite.

In its outgoing Chief Executive, Allan Kilavuka, the embattled national carrier found a steady source of that hope, keeping it aloft through turbulent skies and calmly guiding it through one of its gravest financial crises.

Kenya Power holds the largest share of non-guaranteed commercial loans among State-owned enterprises (SOEs), the latest National Treasury disclosures show, underlining taxpayers’ growing exposure to contingent fiscal risks.

The electricity distributor accounted for nearly a quarter (23.27 percent) of non-guaranteed debt reported by State-owned enterprises for the year ended June 2025.

Banks expect private sector credit growth to strengthen toward the end of this year, supported by an easing monetary policy that has lowered lending rates and improved borrowing conditions for households and businesses.

Central Bank of Kenya (CBK) Market Perceptions Survey notes that bank respondents observed that interest rates have declined, encouraging uptake of new loans and easing repayments on existing variable-rate facilities.

The government owed doctors and Community Health Promoters (CHPs) Sh4 billion in unpaid obligations as of June 30, putting strain on healthcare services across the country, a new report has revealed.

A CHP is trained member of the community who works as a link between the community and formal health facilities.

Sales of new vehicles in the first 11 months of 2025 surpassed the total sales recorded in the whole of 2024, signalling a recovery in Kenya’s automotive market, which has endured dampened demand in recent years.

Industry data released by the Kenya Motor Industry Association (KMIA), show that dealers sold 12,427 new vehicles between January and November 2025, overtaking the 11,352 units sold in the entire 12 months of 2024.