This archive report was first published on 13 July 2021.
Transforming Kenya's Tax Administration: Key Strategies ¶
Kenya's tax administration has undergone significant reforms over the last decade, with a focus on leveraging technology and data analytics to improve compliance and efficiency. The Kenya Revenue Authority (KRA) has launched its 8th Corporate Plan, outlining key strategies to achieve continuous improvement and transformation of the country's tax system.
One of the key strategies is to enhance services to taxpayers through the refinement of i-Tax and other systems, facilitating compliance with tax statutes. The application of cutting-edge technologies such as Machine Learning, Artificial Intelligence, and Blockchain is expected to have a significant impact in deepening the tax administration's analytics capabilities.
The use of data and evidence has been shown to boost tax administration efforts, and these technologies are bound to enhance this further by making sense of data from internal and external systems. This guarantees the underpinning clarity and precision in any intervention. For taxpayers, these will lead to the availability of focused and targeted services, where services are tailored to the needs of specific clusters of taxpayers thanks to the power of data analytics.
Another key strategy is to expand the physical presence in the country's different regions through a multi-channel approach, combining physical and digital channels. This approach is based on the realization that not everyone is adept at using or having access to modern technology.
Policy and administrative simplification is also a key anchor in the transformation of any tax system. A simplified tax system is a key parameter in compliance improvement, competitiveness, expansion of the tax base, and the attractiveness of the country as a preferred investment destination. The administrative strategies in this respect involve streamlining processes, systems, and procedures so that it is easier and cheaper to comply.
The idea is to smoothen processes such as exports, imports, tax filing, and payments. On the other hand, the strategic intent to simplify the regulatory and policy is about re-looking at the tax statutes for any complexities, a process spearheaded by the National Treasury. Germane to the concept of simplification are the proposed National Tax Policy and the Medium-Term Strategy.
Finally, forging strategic partnerships becomes an imperative, making it a key thrust in tax administration reforms. The development of taxation strategies, regulations, and guidelines all require the input of relevant stakeholders. Not only will the contributions of different stakeholders advance tax administration in terms of content, but they also depict an adherence to the express requirement of the constitution, as well as being a manifestation of a healthy social contract between the government and the taxpayer.
