In a bid to simplify tax compliance and broaden the tax base, the Kenya Revenue Authority (KRA) is gearing up to launch a WhatsApp chatbot to help businesses with electronic tax invoicing. This move aims to facilitate tax compliance, especially among small and medium enterprises (SMEs), which have struggled to adapt to the current electronic Tax Invoice Management System (eTIMS). Currently, only 18.1% of registered taxpayers are using eTIMS, leaving a significant gap in adoption.
The introduction of the WhatsApp chatbot is expected to make it easier for traditionally hard-to-tax sectors to comply with the KRA’s requirements. The chatbot will guide business owners through tax processes, helping them issue compliant invoices while easing their tax burden.
This initiative is part of the KRA’s broader strategy to integrate new technologies, including artificial intelligence (AI) and machine learning, into its revenue collection efforts. These technologies are designed to detect tax evasion more effectively and enhance overall efficiency in tax administration.
Additionally, the authority plans to introduce a real-time tax system that will integrate cryptocurrency exchanges and marketplaces, enabling the KRA to monitor and record digital transactions. In a related move, the Kenyan government has announced that by December 25, 2024, M-PESA Paybill and Till numbers will serve as virtual Electronic Tax Registers (ETRs), further streamlining the process of tax collection.
WhatsApp is Kenya’s most popular messaging platform, making it a natural choice for this initiative. Kenyan businesses are already familiar with using the platform for commercial activities. For instance, Sukhiba Connect, a Kenyan social commerce startup, has been leveraging WhatsApp to connect over 35,000 SMEs with customers, facilitating sales, marketing, and payments. This platform recently secured $1.55 million in funding to expand WhatsApp-based commerce further.
Meanwhile, WhatsApp is also rolling out several new features globally, expected to enhance user experience for Android and iOS users. These updates will focus on improving communication tools, chat management, and image verification to help users confirm the authenticity of shared images.
However, despite its growing presence in business and communication, WhatsApp is facing legal challenges in Africa. The messaging platform is under scrutiny from the South African and Nigerian governments over privacy concerns. South Africa has issued an enforcement notice to WhatsApp regarding privacy compliance, while Nigeria has fined the platform $220 million for data privacy violations.
As Kenya moves towards a more tech-driven approach to tax collection, the KRA’s WhatsApp chatbot could serve as a model for other nations looking to improve compliance through digital solutions. The integration of social media platforms into tax systems marks a significant shift in how governments are leveraging everyday technologies to enhance public administration.
