Most Kenyan businesses are avoiding using paybill numbers because of tax.The use of paybill had become common but ever since KRA started harassing traders, most shops and businesses instructed their customers to pay in cash or withdraw money in the nearby agent.
KRA is going to enforce turnover tax which is 3% of the total sales regardless of whether a business makes profit or not.Safaricom will automatically deduct the money once received in the paybill number. This has prompted business people to instruct their clients to pay in cash.
It’s worrying that majority of businesses will stop using paybill or till number, implying that tax collection will drastically reduce.
If the government intends to increase tax collection, they should lower taxes and make it easy for businesses to operate. But if the taxes continue to be increased, eventually many businesses will close down.
