This archive report was first published on 5 November 2019.
On October 16-17, 2019, the Kenya Revenue Authority (KRA) hosted the 5th Annual Tax Summit, with the theme 'Tax Simplification and Digitisation for Economic Transformation.'
The summit highlighted the need for the KRA to adapt to the digital economy, which is transforming the way businesses operate and interact with their customers.
One of the key challenges facing the KRA is the collection of taxes from multinational enterprises (MNEs) that have divided roles in different jurisdictions and run operations from a central location.
These MNEs have discovered efficiencies in pooling revenue into one basket, using enterprise resource planning tools to monitor and report on their finances.
However, the KRA must find ways to work with these efficiencies and not hinder the growth of the digital economy.
Another challenge is the rise of online shopping, which has led to a decrease in invoices and paper trails in transactions.
The KRA must redefine what constitutes a business nexus in the digital age, where services are provided online without the need for a physical presence.
As stated during the summit, the KRA must focus on job creation using digital platforms and enable the youth to start their own businesses, creating employment opportunities.
By understanding the taxpayer and seeing themselves as shareholders in their businesses, the KRA can engage stakeholders to support revenue collection and relieve the burden of revenue targets.
