KRA embraces technology to combat tax evasion, boost revenue

The Kenya Revenue Authority (KRA) is harnessing advanced technologies like the Internet of Things (IoT), Big Data, Artificial Intelligence (AI), and Blockchain to improve tax collection and enhance its role in international trade.

This initiative comes in response to the rapid technological advancements that are changing how businesses operate.

During the KRA Summit 2024 held in Nairobi, Commissioner General Humphrey Wattanga emphasised the importance of integrating Application Programming Interfaces (APIs), AI, and Machine Learning into the tax system.

"KRA recognises the transformative power of technology in taxpayer services and operational efficiency," he stated.

Wattanga noted that these technologies would not only increase tax revenue but also build trust and transparency within the system.

He highlighted that the ongoing reforms are crucial for enhancing revenue mobilization through greater efficiency and compliance.

The use of APIs will streamline data exchanges between KRA and taxpayers, simplifying tax filing and payment processes.

Collaboration

Wattanga also urged tax authorities globally to collaborate to improve their capacity to detect and prevent tax evasion.

"By working together, countries can ensure that everyone pays their fair share of taxes," he said.

The three-day summit, themed "Powering trade facilitation and domestic resource mobilisation in the digital age," provided a platform for global stakeholders to address various economic and tax challenges.

Discussions focused on issues like digital trade, sustainable practices, cybersecurity in customs, and the promotion of gender equality in tax systems.

Lilian Nyawanda, KRA Commissioner for Customs and Border Control, explained that digitization is key to fully implementing borderless trade.

"It is not just getting a system, it is more of how we fully automate processes and minimize human interactions and interventions," she said.

Prime Cabinet Secretary Musalia Mudavadi called for a reevaluation of traditional tax frameworks, advocating for innovative solutions that ensure fair contributions from all sectors.

"innovation ranging from digital taxation platforms to blockchain technologies" can greatly enhance revenue generation and trade management," he noted.

National Treasury Cabinet Secretary John Mbadi acknowledged that despite efforts to improve revenue collection, challenges like tax malpractices continue to hinder progress.

He pointed out that illicit financial flows, including money laundering and tax evasion, pose significant risks, especially for developing nations.

"Illicit financial flows, including money laundering, tax evasion, and corruption, pose significant challenges," Mbadi stated.

The summit aimed to unite key players in taxation and develop practical solutions that will strengthen the KRA's ability to meet its revenue targets and foster a more equitable tax system in Kenya.