You’ve just paid via M-Pesa, and the transaction message lands on your phone within seconds.
For many Kenyans, that SMS is seen as the final word roof that money moved and the deal is done. But as the Kenya Revenue Authority (KRA) rolls out stricter tax compliance frameworks under the Finance Bill 2025, one question is becoming more common (and more important): does an M-Pesa receipt count as an Electronic Tax Receipt (ETR)?
The short answer is no at least, not by itself.
Let’s break down why your M-Pesa message is not an ETR, what qualifies as one, and how this change affects both consumers and business owners.
What Is an ETR?
An Electronic Tax Receipt (ETR) is a special kind of receipt that confirms your purchase has been reported to KRA.
It’s generated through a system called eTIMS (Tax Invoice Management System). That system sends the receipt directly to KRA in real time. Here’s what a proper ETR includes:
- •The seller’s KRA PIN
- •A breakdown of any taxes (like VAT)
- •A unique invoice number
- •A QR code or control code
- •And if needed, your PIN (for businesses)
So, Why Isn’t My M-Pesa Receipt Enough?
Great question and this is where many people get confused. When you pay with M-Pesa, you get a message with:
- •Amount sent
- •Business name or Paybill
- •Transaction ID
- •Date and time
But that message:
- •Doesn’t show any tax
- •Isn’t linked to KRA’s eTIMS system
- •Can’t be used to claim tax deductions (like VAT refunds)
So, while it’s proof of payment, it’s not proof of tax compliance.
What Changed in 2024? M-Pesa Paybills as Virtual ETRs
Late last year, the government rolled out new rules: M-Pesa Paybill and Till numbers used by businesses must now integrate with eTIMS.
This means:
- •Businesses using Paybill should link it to KRA’s system
- •KRA can track sales made via M-Pesa directly
- •This helps widen the tax net
But this doesn’t mean that every M-Pesa receipt is now an ETR. The business still has to issue you a proper eTIMS receipt.
How to Check If a Receipt Is a Valid ETR
Here’s a simple way to verify:
- •Visit the KRA Invoice Checker
- •Enter the control number or invoice details from your ETR
- •You’ll see if it was submitted to KRA or not
If it’s just an M-Pesa SMs it won’t show up here.
How Businesses Can Generate ETRs (Even on M-Pesa)
If you run a business and collect money via M-Pesa, you must issue an ETR if you’re VAT-registered or meet KRA’s thresholds.
Here’s how:
- •Register on KRA eTIMS
- •Use KRA’s web or mobile invoice tool
- •Integrate your Paybill or Till number with eTIMS
- •Issue receipts that include tax breakdowns and control numbers
There are even mobile-friendly tools for small businesses to do this without fancy hardware.
What Happens If You Don’t Issue ETRs?
KRA now compares your M-Pesa deposits vs your tax returns.
So if you:
- •Collect KES 500K via M-Pesa monthly
- •But only report KES 100K in sales
- •Expect a knock on your digital door…
Failure to issue ETRs can lead to:
- •Penalties
- •Audits
- •Loss of tax credits
- •Or worse, getting flagged as non-compliant
In Summary
Your M-Pesa SMS is proof of payment not tax compliance. If you’re in business, issuing ETRs is no longer optional. If you’re a buyer, start asking for them.
As Kenya moves toward full digital tax enforcement in 2025, understanding the difference between M-Pesa and an ETR could save you money or legal trouble.
