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The Kenya Revenue Authority (KRA) is set to unveil a WhatsApp chatbot designed to help small business owners generate electronic tax invoices directly through the popular messaging platform. This initiative aims to enhance voluntary tax compliance among micro, small, and medium-sized enterprises (MSMEs) while simplifying the invoicing process through the electronic tax invoice management system (eTIMS).

The chatbot will allow traders to create tax invoices via WhatsApp, addressing complexities and noncompliance issues that many small businesses face. Currently, only about 18.1% of registered taxpayers have adopted eTIMS, with many smaller enterprises struggling to grasp or implement the system. By facilitating compliance in traditionally hard-to-tax sectors, the chatbot is expected to expand the tax base significantly.

This initiative is part of KRA’s broader strategy to leverage advanced technologies such as artificial intelligence (AI) and machine learning to enhance revenue collection and detect tax evasion more effectively.

Additionally, the KRA plans to implement a real-time tax system that will integrate cryptocurrency exchanges and marketplaces to monitor and record transactions. As part of this modernization effort, the Kenyan government also aims to utilize M-PESA Paybills and Till numbers as virtual Electronic Tax Registers (ETRs) by December 25, 2024.

WhatsApp remains the most popular digital communication tool in Kenya, consistently ranking among the top social media platforms alongside Facebook and YouTube from 2021 to 2023. Kenyan business owners are already accustomed to using WhatsApp for various business functions. For example, Sukhiba Connect, a Kenyan social commerce startup, utilizes WhatsApp to connect businesses with customers, facilitating sales, marketing, customer service, and payments. The platform has partnered with over 35,000 SMEs and assisted more than 30 major companies in tapping into WhatsApp commerce, securing $1.55 million in funding to expand its services.

In parallel, WhatsApp is set to introduce several new features in October 2024 aimed at enhancing user experience for Android and iOS users. These updates will focus on improving communication and customization, including new tools for chat management and image verification to help users confirm the authenticity of shared images.

However, WhatsApp is currently facing legal challenges from the governments of Nigeria and South Africa concerning privacy issues. The South African government has issued an enforcement notice to WhatsApp regarding compliance with privacy regulations, while Nigerian authorities have imposed demands related to data privacy, including a substantial fine of $220 million on the messaging platform.

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