Times Tower Building in Nairobi which hosts Kenya Revenue Offices (KRA).[Wilberforce Okwiri/Standard]
Cash-hungry KRA now shifts gears to tax digital taxi drivers
Business
By
Brian Ngugi
| Aug 30, 2025
The Kenya Revenue Authority (KRA) is targeting tens of thousands of digital taxi drivers in a new crackdown to plug a Sh47.3 billion revenue shortfall, a move that risks squeezing drivers’ margins in an already strained gig economy.
The push, which mandates all ride-hailing drivers to issue e-TIMS-compliant invoices for every trip, represents one of the agency's most aggressive efforts to formalise a historically hard-to-tax sector amid repeated collection failures.
In an email to drivers seen by Weekend Business, ride-hailing firm Uber has announced plans to implement technology to automate the invoice issuance on its drivers' behalf, as it demanded immediate action.
“Share your KRA PIN certificate via the driver app starting today,” the company states, emphasising that submission is mandatory for all active drivers.
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While Uber frames the change as a way to attract business customers requiring invoices, drivers say it places renewed pressure on gig workers already facing thin operating margins.
The administrative burden of compliance is likely to compound financial strain for drivers and platforms alike.
The e-TIMS system, a central pillar of KRA's strategy, requires real-time transmission of invoices to the tax authority's servers, creating an auditable digital trail to curb evasion.
The crackdown casts a wide net. Industry estimates suggest over 50,000 drivers operate across 14 licensed platforms in Kenya, including Uber, Bolt, Little, and Yego, with many drivers using multiple apps to maximise earnings.
The enforcement shift comes as the KRA prepares to mark its 30th anniversary next week under intense scrutiny.
The agency collected Sh2.257 trillion in the year through June, missing its revised target and exacerbating fiscal strain at a time when national debt has surpassed Sh11.5 trillion.
KRA is expected to provide a detailed scorecard and additional insights into how it plans to achieve its collection targets next week, as it marks its 30th anniversary amid persistent revenue shortfalls and heightened pressure to widen the tax base.
National Treasury Secretary John Mbadi and other senior officials are expected to attend the celebrations.
Mbadi has often rallied KRA management to put its act together.
KRA during the September 1 event will highlight the agency’s three-decade journey and outline its strategy for enhancing tax administration.
Official data reveals the KRA collected Sh2.257 trillion in the fiscal year ending June 2025, falling Sh47.3 billion short of its revised target. This marked the third consecutive year of revenue underperformance, exacerbating fiscal strain at a time when Kenya’s public debt has surpassed Sh11.5 trillion.
The expanded enforcement by KRA comes amid a major restructuring within the Times Tower Agency, including a recruitment drive for senior positions such as Deputy Commissioners, aimed at improving revenue collection.
The authority has faced mounting pressure to widen the tax base, particularly within the informal economy, where compliance has been historically low.
Tax policy experts have voiced concerns that aggressive enforcement may backfire. Tax consultant Ian Njoroge recently warned that excessive taxation could drive more economic activity underground.
“Every new tax measure pushes more transactions underground,” he said, highlighting a vicious cycle where raised rates encourage evasion rather than compliance.
These concerns were earlier echoed by former Treasury Cabinet Secretary Professor Njuguna Ndung’u, who cited the Laffer Curve concept, noting that beyond a certain point, higher tax rates can stifle economic activity and reduce overall revenue.
With the National Treasury needing to repay over Sh1.5 trillion to foreign creditors between 2025 and 2027, the outcome of this and other enforcement measures may prove critical to Kenya’s fiscal stability.
The government now faces difficult choices: intensify tax enforcement amid economic headwinds, increase borrowing, or implement spending cuts that may delay development projects.
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