• The Kenya Revenue Authority (KRA) is looking to introduce a WhatsApp chatbot to enable small business owners to generate electronic tax invoices on the messaging platform.

• This initiative aims to achieve several key objectives, including increasing voluntary tax compliance among micro, small, and medium-sized businesses (MSMEs). It would also make tax invoicing easier with the electronic tax invoice management system (eTIMS).

• Traders can use the chatbot to create tax invoices via WhatsApp, addressing complexity and noncompliance issues among small businesses.

Only about 18.1% of registered taxpayers have reportedly adopted eTIMS, with many smaller businesses struggling to understand or implement the system. However, the chatbot is expected to widen the tax base by facilitating compliance among traditionally hard-to-tax sectors.

This move comes as the revenue authority prepares to implement technologies such as artificial intelligence (AI) and machine learning to improve revenue collection and detect tax evasion.

The authority also plans to implement a real-time tax system integrating cryptocurrency exchanges and marketplaces to monitor and record transactions. Additionally, the Kenyan government intends to use M-PESA Paybills and Till numbers as virtual Electronic Tax Registers (ETRs) by 25 December 2024.

WhatsApp remains Kenya’s most popular digital medium. Between 2021 and 2023, WhatsApp, Facebook, and YouTube remained the nation’s leading social media platforms.

Moreover, Kenyan business owners are likely familiar with using WhatsApp for business processes. Sukhiba Connect, a Kenyan social commerce startup, uses WhatsApp to connect businesses with customers, facilitating sales, marketing, customer service, and payments. It boasts of working with over 35,000 SMEs, helped more than 30 major companies tap into WhatsApp commerce, and secured $1.55 million to boost WhatsApp business.

In other news, WhatsApp is rolling out several new features in October 2024 to enhance the user experience, available for Android and iOS users. The update will focus on making communication easier and more customisable, including new tools for chat management and image verification to help users verify the authenticity of shared images.

Meanwhile, WhatsApp is facing legal challenges from the governments of Nigeria and South Africa over privacy concerns. The South African government issued WhatsApp an enforcement notice over privacy compliance, while the Nigerian authorities have placed demands on WhatsApp regarding data privacy concerns, including fining the messaging platform $220 million.