Cashless system: To Give KRA a billion sector share

People who use public transport could be hit with an unexpected tax bill once the new cashless mode of paying for transport is fully implemented.

The Kenya Revenue Authority ( KRA) is reportedly working on a framework to facilitate taxation of all passenger service vehicles, matatus and minibuses that carry up to 24 people. This move is expected to saddle Kenyans with increased fares once the card system becomes operational.


 National Treasury Cabinet Secretary Henry Rotich confirmed that the Government had started preparing the laws necessary to facilitate taxation of the revenues matatus receive from commuters. “We have given the legal framework and the tax laws are very clear. It is law that everybody must pay tax, and the Kenya Revenue Authority is just implementing that law. Nobody should be exempted,” he said. Budget policy According to Mr Rotich, the income earned from the matatu sector, as well as rental incomes received by landlords, must be taxed just like revenue from other sources. “If you are running a matatu, it is just the same as going to a job. That is the rationale, really. We want the Budget policy to cover as many taxpayers as possible, including matatus and landlords,” he said. Once the cashless system is operational, commuters will pay fares by tapping pre-paid cards on Point of Sale terminals installed in compliant buses and matatus. The system is already in use in some PSVs like MOA Compliant, which ply Eastlands, Ngong Road and Kikuyu-Waiyaki routes in Nairobi. According to the Matatu Owners Association (MOA), this has led to a 30 per cent increase in revenue collection.