Tax Remittance

Remit taxes to KRA using M-Pesa by initiating tax payment requests and handling asynchronous result notifications.

User Stories

As a fintech product owner, I want to programmatically remit taxes to KRA so that I can automate compliance processes.
As an integrations developer, I want a simple client and clear webhook callbacks so I can implement reliable end-to-end flows with minimal boilerplate.
As a billing operations engineer, I want result and timeout notifications with acknowledgements so I can reconcile transactions and trigger retries or alerts when needed.
As a reseller partner, I want a tested SDK and examples so I can onboard quickly and reduce integration defects.

Parameters Definition

Parameter	Type	Description
Initiatorrequired str	String	Username used to initiate the request (must be pre-approved by Safaricom).
SecurityCredentialrequired str	String	Encrypted security credential of the initiator (base64 encoded).
Amountrequired int	Integer	Transaction amount in KES to be remitted to KRA.
PartyArequired int	Integer	Shortcode from which money is deducted for tax remittance.
AccountReferencerequired str	String	Payment Registration Number (PRN) issued by KRA for the tax payment.
Remarksrequired str	String	Additional information for the transaction (maximum 100 characters).
QueueTimeOutURLrequired str	String	HTTPS endpoint that will receive timeout notifications.
ResultURLrequired str	String	HTTPS endpoint that will receive result notifications.
PartyB int	Integer	KRA shortcode (default: 572572).
CommandID str	String	Command ID for the transaction (default: 'PayTaxToKRA').
SenderIdentifierType int	Integer	Identifier type for sender (default: 4 for shortcode).
RecieverIdentifierType int	Integer	Identifier type for receiver (default: 4 for shortcode).

Response Schema

TaxRemittanceResponse — the synchronous acknowledgement returned by client.tax.remittance(...)

Parameter	Type	Description
OriginatorConversationIDrequired str \| null	String	Unique ID for the request message.
ConversationIDrequired str \| null	String	Unique ID for the transaction.
ResponseCoderequired str \| int	String/Integer	Status code of the request. 0 means success.
ResponseDescriptionrequired str	String	Status message describing the request outcome.

Overview

Tax Remittance enables businesses to pay taxes directly to KRA through M-Pesa. It's an asynchronous operation with callbacks for results and timeouts.

💡Implementation Options

Use the MpesaClient facade for simple and safe integration: it manages authentication, header injection and returns typed Pydantic models.
Use the Direct API (TaxRemittance service + TokenManager + HttpClient) if you need full control over request/response handling, middleware, or custom error behaviors.
Both are available as sync and async variants (MpesaClient/AsyncMpesaClient, TaxRemittance/AsyncTaxRemittance) — reach for async when remitting taxes from inside an async web framework, or when filing several PRNs concurrently at the end of a reporting period.

💡Why use MpesaClient

The facade handles token retrieval and attaches Authorization headers so you can call high-level operations like initiating tax remittance with minimal boilerplate.

Quick Setup (Sync)

Python

# Example: initiate tax remittance using the high-level client
from mpesakit import MpesaClient

client = MpesaClient(consumer_key="...", consumer_secret="...", environment="sandbox")

resp = client.tax.remittance(
  initiator="TaxPayer",
  security_credential="encrypted_credential",
  amount=239,
  party_a=888880,
  account_reference="353353",
  remarks="Tax payment for Q1",
  result_url="https://your.example/result",
  queue_timeout_url="https://your.example/timeout"
)

if resp.is_successful:
  print("Tax remittance initiated successfully")
else:
  print("Tax remittance failed:", resp.ResponseDescription)

💡Notes

The facade returns typed Pydantic models (e.g., TaxRemittanceResponse) for ergonomic access to fields and helpers like is_successful.
Authentication tokens are handled transparently by the client.

Quick Setup (Async)

Python

import asyncio
from mpesakit import AsyncMpesaClient

async def main():
  async with AsyncMpesaClient(
      consumer_key="...", consumer_secret="...", environment="sandbox"
  ) as client:
      resp = await client.tax.remittance(
          initiator="TaxPayer",
          security_credential="encrypted_credential",
          amount=239,
          party_a=888880,
          account_reference="353353",
          remarks="Tax payment for Q1",
          result_url="https://your.example/result",
          queue_timeout_url="https://your.example/timeout"
      )

      if resp.is_successful:
          print("Tax remittance initiated successfully")
      else:
          print("Tax remittance failed:", resp.ResponseDescription)

asyncio.run(main())

⚠️Filing several PRNs at once

If you're remitting taxes for multiple Payment Registration Numbers in one run, gather the coroutines rather than awaiting sequentially — but check Safaricom's rate limits and chunk large batches:

prns = [
    dict(account_reference="PRN-001", amount=15000),
    dict(account_reference="PRN-002", amount=8200),
    # ...
]

responses = await asyncio.gather(*(
    client.tax.remittance(
        initiator="TaxPayer",
        security_credential="encrypted_credential",
        amount=p["amount"],
        party_a=888880,
        account_reference=p["account_reference"],
        remarks="Tax payment for Q1",
        result_url="https://your.example/result",
        queue_timeout_url="https://your.example/timeout",
    )
    for p in prns
))

⚠️Manual lifecycle (without the context manager)

In a long-lived service (e.g. AsyncMpesaClient wired up as a FastAPI dependency), construct it once at startup and call await client.aclose() on shutdown instead of opening a new async with block per request.

Webhook Handling (Result & Timeout)

The callback is an inbound HTTP POST from Safaricom/Daraja — independent of whether the remittance was filed via MpesaClient or AsyncMpesaClient. For the result payload, both clients expose process_tax_remittance_callback, a one-call shorthand for TaxRemittanceResultCallback.model_validate(payload); it's plain validation with no I/O, so it's never awaited even on the async client. There's no equivalent helper for the timeout payload, so that one is still validated directly against TaxRemittanceTimeoutCallback.

Python

# Example: simple FastAPI endpoints for Tax Remittance Result and Timeout
from fastapi import FastAPI, Request, HTTPException
from mpesakit import MpesaClient  # or AsyncMpesaClient — process_tax_remittance_callback is identical on both
from mpesakit.tax_remittance import TaxRemittanceResultCallbackResponse, TaxRemittanceTimeoutCallback, TaxRemittanceTimeoutCallbackResponse
from mpesakit.security.ip_whitelist import is_mpesa_ip_allowed

app = FastAPI()
client = MpesaClient(consumer_key="...", consumer_secret="...", environment="sandbox")

@app.post("/tax/result")
async def tax_result(request: Request):
  payload = await request.json()
  caller_ip = (request.headers.get("x-forwarded-for") or request.client.host).split(",")[0].strip()
  if not is_mpesa_ip_allowed(caller_ip):
      raise HTTPException(status_code=403, detail="forbidden")

  # Equivalent to TaxRemittanceResultCallback.model_validate(payload)
  data = client.process_tax_remittance_callback(payload)
  # process the result (update database, notify user, etc.)
  ack = TaxRemittanceResultCallbackResponse()
  return ack.model_dump(mode="json")


@app.post("/tax/timeout")
async def tax_timeout(request: Request):
  payload = await request.json()
  caller_ip = (request.headers.get("x-forwarded-for") or request.client.host).split(",")[0].strip()
  if not is_mpesa_ip_allowed(caller_ip):
      raise HTTPException(status_code=403, detail="forbidden")

  data = TaxRemittanceTimeoutCallback(**payload)  # will validate incoming fields
  # process timeout notification (log, retry logic, etc.)
  ack = TaxRemittanceTimeoutCallbackResponse()
  return ack.model_dump(mode="json")

💡Important behavior

Result and timeout endpoints should return acknowledgements (ResultCode 0). This confirms receipt to Mpesa Daraja API.
Process the actual tax remittance result asynchronously based on the data in the result callback.

Result Callback Schema

TaxRemittanceResultCallback — posted to ResultURL once the remittance completes

Parameter	Type	Description
Result.ResultTyperequired int	Integer	0 = success, 1 = failure.
Result.ResultCoderequired int \| str	Integer/String	0 indicates the remittance succeeded; any other value is a failure code.
Result.ResultDescrequired str	String	Human readable result description.
Result.OriginatorConversationIDrequired str	String	Matches the OriginatorConversationID from the initial request.
Result.ConversationIDrequired str	String	Matches the ConversationID from the initial acknowledgement.
Result.TransactionID str \| null	String	M-Pesa transaction ID for the remittance, when successful.
Result.ResultParameters.ResultParameter list[{Key, Value}]	Array	Transaction details, e.g. Amount, Currency, TransCompletedTime.
Result.ReferenceData.ReferenceItem list[{Key, Value}]	Array	Reference items, e.g. BillReferenceNumber, QueueTimeoutURL.

Timeout Callback Schema

TaxRemittanceTimeoutCallback — posted to QueueTimeOutURL if the remittance doesn't complete in time

Uses the same Result shape as the Result Callback Schema above (it's the same TaxRemittanceResultMetadata model), just delivered to QueueTimeOutURL instead of ResultURL, typically with a non-zero ResultCode and without TransactionID/ResultParameters.

Callback Acknowledgement Schemas

What your webhook handler should return to Safaricom

Parameter	Type	Description
ResultCode int \| str	Integer/String	Defaults to 0. Used by TaxRemittanceResultCallbackResponse and TaxRemittanceTimeoutCallbackResponse — the typed models to return from your /result and /timeout handlers respectively.
ResultDesc str	String	Defaults to 'Callback received successfully' (result) or 'Timeout notification received and processed successfully.' (timeout).

Responses & Helpers

Example Tax Remittance Success Response

{
  "OriginatorConversationID": "5118-111210482-1",
  "ConversationID": "AG_20230420_2010759fd5662ef6d054",
  "ResponseCode": "0",
  "ResponseDescription": "Accept the service request successfully."
}

💡Response Handling

TaxRemittanceResponse provides is_successful which treats any all-zero string (e.g., "0" or "00000000") as success. Available identically on responses from the sync and async clients.
The SDK normalizes minor provider response typos (e.g., 'OriginatorCoversationID') so fields are accessible reliably.

Error Handling

Python

# Handle errors when calling the service
try:
  resp = client.tax.remittance(...)
except Exception as exc:
  # The underlying HTTP client may raise exceptions on network errors; log and retry as appropriate
  print("Tax remittance failed:", exc)

💡Notes

HTTP or network errors raised by the HttpClient bubble up; wrap calls in try/except (sync) or around the awaited call (async) for robust production behavior.
Tests exercise error flows to ensure exceptions propagate when the HTTP client fails, for both client variants.

Testing & Expected Behaviors

Tax Remittance:
- The service posts to /mpesa/b2bpayment/v1/remittax with Authorization header set via TokenManager (or AsyncTokenManager).
- Responses are returned as TaxRemittanceResponse instances, whether awaited from the async client or returned directly from the sync client.
- The implementation tolerates a common provider typo ("OriginatorCoversationID") and maps it to OriginatorConversationID.
Validation:
- Incoming payloads are validated against TaxRemittanceResultCallback (directly, or via process_tax_remittance_callback) and TaxRemittanceTimeoutCallback. Missing required fields or invalid formats will raise validation errors.
- Use the provided response schemas for acknowledgements; invalid codes are rejected by the model validator.

Next Steps

💡What's Next?

Implement robust webhook handlers for result and timeout notifications. Log and persist notifications to support reconciliation.
Add observability and retry strategies around tax remittance calls and webhook processing to handle transient failures.

📡 Webhook Setup Guide - Best practices for building reliable endpoints
🏗️ Production Setup - Go-live checklist, security and monitoring

User Stories

Parameters Definition

Response Schema

Overview

Quick Setup (Sync)

Quick Setup (Async)

Webhook Handling (Result & Timeout)

Result Callback Schema

Timeout Callback Schema

Callback Acknowledgement Schemas

Responses & Helpers

Error Handling

Testing & Expected Behaviors

Next Steps

Related Documentation​

Related Documentation