What happened

According to a report on Kenyans.co.ke, the Kenya Revenue Authority (KRA) disclosed a set of new measures aimed specifically at traders operating in open markets, kiosks and informal retail outlets. The announcement came in response to a recent directive from President William Ruto, who instructed the tax authority to intensify revenue collection from the informal sector. KRA said the measures will be rolled out over the next few weeks and will involve tighter registration requirements, mandatory digital invoicing and increased on‑site inspections. The authority also indicated that non‑compliant traders could face penalties ranging from fines to temporary suspension of trading licences. While the full list of actions has not been published, the headline points to a shift toward greater digitalisation and enforcement.

Context and background

KRA has long struggled to capture revenue from Kenya’s sizeable informal economy, which accounts for roughly 30 % of gross domestic product and employs millions of small‑scale traders. Past initiatives, such as the introduction of the iTax portal and the Mobile Tax Service (MTS), have achieved mixed results, with many traders citing lack of awareness or limited access to technology as barriers. President Ruto’s recent directive reflects growing political pressure to broaden the tax base ahead of the 2025 fiscal plan, which targets a revenue collection increase of at least 10 % year‑on‑year. The president’s speech, delivered at a national economic forum, underscored the need for “fair contribution from every economic actor, big or small,” and urged KRA to act swiftly.

The new measures are being coordinated with county governments, who will assist in verifying trader identities and ensuring that market permits align with tax registration. County revenue officers have been briefed to work closely with KRA field agents, creating a joint enforcement framework that mirrors the earlier “One‑Stop Shop” model used for large businesses. Moreover, KRA has pledged to launch an awareness campaign through radio, community meetings and social media, aiming to educate traders about the benefits of formalisation, such as access to credit and legal protection.

Historically, attempts to enforce tax compliance among traders have faced resistance, often leading to protests or evasion. The last major crackdown in 2021 resulted in temporary market closures and sparked debate about the balance between revenue goals and livelihoods. Learning from those experiences, KRA now emphasizes a phased approach, starting with registration drives in the largest urban markets—Nairobi’s Gikomba, Eastleigh, and Kariobangi—before extending to smaller towns. The authority also plans to pilot a simplified tax filing system that requires only a few data points, reducing the administrative burden on traders who may lack formal bookkeeping skills.

Compared with what is normal

In previous years, KRA’s outreach to traders has been sporadic, typically limited to annual tax amnesty periods or occasional door‑to‑door registration campaigns. Those efforts yielded modest uptake, with estimates that only about 15 % of informal traders were officially registered as of 2023. By contrast, the current initiative seeks to achieve a registration target of at least 40 % within the first twelve months, a significant jump from historical norms. The emphasis on digital invoicing also marks a departure from the paper‑based receipts that have dominated market transactions for decades. While Kenya’s formal sector already enjoys high e‑filing adoption—over 80 % of registered businesses file electronically—the informal sector’s digital penetration has lingered below 10 %. The new KRA measures therefore aim to close a gap that is wider than any other sector in the economy.

• Current registration rate among traders: roughly 15 % (historical average).
• Target registration under new measures: at least 40 % within a year.
• Digital invoicing adoption in formal sector: >80 %; informal sector: