KRA’s crackdown on small traders involves advanced data matching techniques to expose tax evasion through mobile money platforms. This initiative targets micro, small, and medium-sized enterprises (MSMEs) in Nairobi’s Eastleigh district. The Kenya Revenue Authority (KRA) has identified a trend among traders who change paybills and till numbers to hide revenue.
On April 24, 2026, KRA began sending messages to flagged traders urging them to regularize their tax statuses. Traders with an annual turnover exceeding Sh5 million must issue eTIMS invoices. Over 500,000 businesses were onboarded to eTIMS by December 2025. KRA aims to onboard 1.2 million businesses by the end of 2026.
KRA estimates it loses approximately KES 300 billion annually due to informal sector non-compliance. “It is very easy to see the transactions. If you are a trader, there is what you purchase and there is what you sell,” said Lilian Nyawanda of the KRA.
Many businesses in Eastleigh face challenges obtaining eTIMS invoices, according to George Obell from the Eastleigh Business District Association. He noted that many traders source goods from the area but struggle with compliance issues.
KRA has issued a final notice for businesses to settle outstanding dues by April 30, 2026. Failure to comply may result in penalties up to KES 20,000 for non-compliance.
The digitalization of the Kenyan economy means that every digital footprint is now visible to the taxman. “A transaction is not completed by one party. It has two parties,” Nyawanda added, emphasizing the importance of transparency in financial dealings.
As KRA continues its enforcement efforts, the impact on MSMEs remains significant. Yet, the effectiveness of these measures will depend on how swiftly traders adapt to new compliance requirements.
