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  • Treasury CS Ukur Yattani (Left) with KRA Commissioner-General Githii Mburu (right) at Treasury Buildings in May 2020.
  • The Kenya Revenue Authority (KRA) has embarked on an aggressive tax collection strategy that will see it adopt the efficient revenue collection tactics from the leading world tax agencies. 

    As part of the plan, KRA will rebrand from an authority to a service agency (Kenya Revenue Service) - similar to the Internal Revenue Service (IRS) which collects taxes on behalf of the United States federal government. 

    At the same time, KRA has set up a new Technology, Innovation and Artificial Intelligence division to drive its strategy for taxing digital entities.

    The new technology, which includes use of Artificial Intelligence, is aimed at maximising efficiency in the same way that IRS uses cutting edge technology to collect taxes and administering the Internal Revenue code.

    KRA offices in Nairobi.
    A file image of the reception area at KRA offices in Nairobi.

    The IRS has been known for keeping pace with rapid technological change, for instance, they have applied data and analytics to refine identity theft detection models, filters and business rules sets designed to detect refund fraud and noncompliance.

    IRS also processes robotics, blockchain and artificial intelligence and integrates technologies that enable more efficient mission delivery. Something that KRA wants to mirror. 

    KRA wants to tax more workers in the informal sector in a bid to collect Ksh6.8 trillion over the next three years so as to keep up with ballooning public spending needs.

    The tax base expansion drive, KRA says, will involve recruiting new taxpayers and introducing new taxes in a move that will burden taxpayers with additional obligations.

    It estimates that informal Sector workers have hit Ksh15.1 Million, 83 per cent of Kenya's workforce, compared with just Ksh 3.1 million formal employees, who pay income tax on their monthly earnings.

    The agency especially wants to squeeze more taxes from real estate investors, agriculture, high-net-worth individuals, registered companies and taxpayers under the turnover tax regime to increase their contribution to the revenue basket.

    Meanwhile, the taxman plans to nearly double its 7,955 staff over the period to 14,555 to address its capacity issues that have inhibited the implementation of tax collection measures.

    The agency also blames Treasury funding deficits and a poor business environment due to the pandemic as key factors behind its inability to hit revenue collection targets it had set for the just ended three-year cycle that started in 2018.

    KRA staff inspects a business during a door-to-door crackdown on Nairobi businesses on Thursday, March 18, 2021.
    KRA staff inspects a business during a door-to-door crackdown on Nairobi businesses on Thursday, March 18, 2021.

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