This archive report was first published on 7 October 2019.
Kenya Revenue Authority (KRA) has gained significant muscle in the fight against tax evasion, thanks to comprehensive data gathering from other government agencies.
According to KRA officials, the strategy has been a success, particularly in bringing aboard evasive landlords. The use of data for tax purposes boosted collection from the real estate alone by 41 percent.
"The data centre now gives us a 360-degree view of a taxpayer, making it hard to misdeclare. All one has to do is to declare the true income and pay full tax on it, no one will follow you," said Cosmas Kemboi, KRA chief manager in charge of knowledge management and innovation.
Under the Tax Procedures Act, institutions and persons are compelled to submit third-party returns upon being required to do so by the commissioner. Telcos, which had previously opposed sharing data on mobile money transactions, are now in discussion with KRA to access the information.
The digitisation of government operations, including payments through the Integrated Financial Management Information System (Ifmis), has also made it easier for KRA to assess individuals and companies for taxes. Those doing business with counties cannot escape with the Ifmis now integrated with KRA's i-Tax.
With the fast-growing gig economy, data sharing will be a game-changer for KRA, which finds it hard to estimate incomes from individuals involved in multiple income-generating activities. Online traders, whose tax compliance has been shaky, are also on the taxman's radar.
KRA plans to have at least seven million more taxpayers on its systems by the end of June 2021, after the tax base grew to 50.5 million people in the year ended June 2019.
