Over 390,000 Kenyans & Companies Caught in KRA’s Ongoing Hunt for False Nil Returns 

Hello and welcome to the Money News Roundup Newsletter, where we are covering KRA's audit that has nabbed over 390,000 individuals and firms that have not been paying taxes. We also cover plans by the government to impose a 2% levy on Airbnb and short rentals.

Over 390,000 Kenyans & Companies Caught by KRA for Failing to Pay Ksh759B Taxes

Kenya Revenue Authority (KRA) has identified 392,162 firms and wealthy individuals owing unpaid taxes amounting to Ksh759.7 billion.

According to the Business Daily, the targeted individuals could soon face travel bans, asset freezes, and deactivation of Personal Identification Numbers (PINs).

The findings follow an audit of the withholding tax registry, which revealed major discrepancies between income declared by taxpayers and amounts reported by third parties that paid for their services.

In several cases, individuals and firms filed nil returns despite evidence of active transactions throughout 2024.

Under withholding tax rules, firms paying for services such as consultancy deduct and remit a portion of tax to KRA, with the recipient required to declare the full income later and pay the balance after allowable expenses. 

However, KRA says many suppliers failed to remit the full tax despite higher payments being declared by their clients.

The authority launched an income and expenditure verification exercise on January 1, drawing data from eTIMS invoices, withholding tax certificates, and import records. According to Commissioner for Micro and Small Taxpayers George Obell, earnings from the gig economy and fees paid to consultants, lawyers, managers, and trainers are among the most under-declared.

KRA has begun prepopulating undeclared income on taxpayers’ records ahead of the June filing deadline and will pursue non-compliant individuals through suppliers, banks, and prosecution. KRA also suspended the filing of nil returns on Friday as it audits its tax records to catch tax cheats.

Tourism Fund to Impose 2% Levy on Airbnb and Other Short-Term Rentals 

The Tourism Fund (TF) plans to expand the 2% tourism levy to cover short-term rentals listed on digital hospitality platforms such as Airbnb and Booking.com in a move aimed at addressing enforcement gaps created by online bookings.

As reported by the Business Daily, owners will be expected to forgo 2% of their gross earnings towards the levy.

The new system, expected to roll out by the end of June, will bring online accommodation providers into the formal levy framework by taxing bookings at source. 

This follows a revenue shortfall in the year ended June 2025, when the Fund collected Ksh5.1 billion against a target of Ksh5.5 billion. 

Collections had risen from Ksh4.9 billion in 2024 and Ksh3.9 billion in 2023, but TF says the gap was largely due to its inability to capture revenue from short-term rentals such as Airbnbs, homestays, and villas.

TF chairperson Samson Some said there is no legal barrier to collecting the levy from digital platforms, noting that the challenge has been operational. Existing systems were designed for traditional hotels and restaurants and have struggled to track operators managing multiple units or frequently changing properties while maintaining the same online profiles.

Under the proposed model, the levy will be automatically deducted at the point of booking and remitted directly to the Tourism Fund by the platforms. 

The TF plans to implement the system through third-party digital payment partners and has urged short-term rental operators to formalise their businesses through licensing and tourism associations.

Regional Competition Authorities Launch Review of Vodacom’s Bid to Take Control of Safaricom

Regional competition authorities have launched formal reviews of Vodacom Group’s proposed acquisition of control in Safaricom.

As reported by the Kenyan Wall Street, the East African Community Competition Authority (EACCA) and the COMESA Competition and Consumer Commission (CCCC) are assessing whether the deal could reduce competition or affect public interest in the region. 

The transaction involves Vodafone Kenya Limited, a Vodacom subsidiary, acquiring a 15% stake from the government, alongside an internal restructuring of Vodafone International Holdings B.V.’s shareholding.

If approved, Vodacom’s total interest in Safaricom will rise from 40% to about 55%, giving it effective control, while the government will retain 19.99%.

Authorities are scrutinising potential impacts on market dominance in mobile money and digital services. Safaricom operates in Kenya and Ethiopia, providing telecoms, broadband, and mobile finance, including M-Pesa. 

Govt to Borrow Ksh125 Billion in Short-Term Loans for Roads and Repay via Fuel Levy

As reported by Bloomberg, Kenya plans to raise Ksh125 billion in short-term syndicated loans this year to fund ongoing road projects, with plans to refinance the debt later using longer-term bonds backed by a fuel levy. 

This will bring the total borrowing secured against the 25 Ksh-per-liter fuel levy to Ksh300 billion.

Acting Kenya Roads Board Director-General Martin Agumbi said Ksh60 billion will be received in the first half of the year, with the rest in the new fiscal year starting July.

The government, constrained by limited borrowing space after the 2024 protests, is leveraging the fuel levy to fund road projects estimated at Ksh890 billion, far above annual budget allocations of Ksh55 billion. 

Previous syndicated loans totaling Ksh141 billion will be refinanced via bonds repaid from the levy. The new borrowing will securitize Ksh5 per liter for repayment.

Institutions Buy as Retail and Foreign Investors Cash Out at NSE

Local institutional investors increased their equity holdings at the Nairobi Securities Exchange (NSE) in 2025 as individual and foreign investors sold shares to lock in gains from last year’s rally. 

Data shows local firms posted net equity purchases of Ksh14.5 billion, while retail investors were net sellers, offloading shares worth Ksh2.59 billion.

The sell-off followed a record 51.8 percent market gain that lifted investor wealth by more than Ksh1 trillion, from Ksh1.93 trillion in 2024 to Ksh2.94 trillion by December 2025. Local corporates bought Ksh67.5 billion in shares and sold Ksh53 billion, positioning for dividends.

Equity turnover rose to a five-year high of Ksh145.47 billion as prices surged, led by small-cap stocks. Safaricom gained 66.2 percent. Foreign investors were also net sellers, recording Ksh11.8 billion in net outflows as they shifted funds to advanced markets. Read more

CAK Grants KCB Approval to Acquire 75% Stake in Riverbank Solutions

KCB Group has received clearance from the Competition Authority of Kenya (CAK) to acquire a 75 percent stake in payments firm Riverbank Solutions in a deal valued at about Ksh2 billion. 

As reported by Techcabal, the transaction, however, still requires approval from the Central Bank of Kenya.

In a Kenya Gazette notice, CAK said the approval is conditional on KCB safeguarding Riverbank’s customer and transactional data and ensuring all existing contracts with clients are honoured. The regulator directed that third-party customer, merchant, and transactional data be ring-fenced and not used beyond what is necessary to run the business.

The acquisition aligns with KCB’s strategy to transition from a traditional lender into a platform-based financial services provider, with payments and embedded finance seen as key growth areas. 

The deal was first announced in March 2025, alongside a separate proposal to acquire Pesapal, which is still under regulatory review. Founded by Nick Mwendwa in 2010, Riverbank Solutions operates in Kenya, Uganda, and Rwanda, providing digital payment and revenue collection systems to businesses, government agencies, and county administrations.

Absa Appoints Renato D’souza from Stanbic as Business Banking Director

Absa Bank Kenya appointed Renato D’souza as director of business banking.

D’souza now moves from his role as head of commercial banking at Stanbic, where he served for nine years.

Meanwhile, Elizabeth Wasunna-Ochwa has been promoted to the newly created position of director of strategic partnerships.

Wasunna will focus on deepening Absa’s ties with key stakeholders, including the National Chambers of Commerce and Kenya Private Sector Alliance. The bank’s executive team now has 12 directors.

Absa’s business banking loan book stood at Ksh309.7 billion at the end of September 2025, slightly down from Ksh311.4 billion the previous year, while deposits grew to Ksh384.3 billion from Ksh351.7 billion. Read more