Kenya is set to implement a comprehensive tax reform plan that includes integrating pay bills and till numbers with the Kenya Revenue Authority (KRA), introducing Virtual Electronic Tax Receipts (ETRs), and leveraging advanced technologies like Artificial Intelligence (AI) and Machine Learning.
The government’s aim to is boost tax collection, ensure greater compliance, and modernize the tax system.
The government’s aim is to boost tax collection, ensure greater compliance, and modernize the tax system. The integration of pay bills and till numbers with the Kenya Revenue Authority (KRA), which takes effect on December 25, 2024, is expected to simplify the tax reporting process for businesses and individuals.
Additionally, the implementation of Artificial Intelligence (AI) and Machine Learning will enable KRA to identify tax evasion patterns, optimize resource allocation, and predict future revenue streams.
“AI and Machine Learning will analyse vast data sets to identify tax evasion patterns, optimize resource allocation, and predict future revenue streams. Ultimately, integrating technology will not only boost tax collection but also foster trust and transparency within the tax system,” KRA Director General Wattanga said during the 2024 KRA Annual Summit.
Moses Kuria, President William Ruto’s senior advisor on economic issues, announced the integration, stating that it would help the government generate more revenue for its programs. The move will also introduce Virtual Electronic Tax Receipts (ETRs) for all pay bills, simplifying the tax reporting process.
KRA Summit Day 3. pic.twitter.com/Ye3ZbGK94b
— Hon.Moses Kuria,HSC (@HonMoses_Kuria) October 9, 2024
Kuria acknowledged that the integration might face resistance but emphasized the government’s commitment to implementing the program fully.
He noted that the current tax burden disproportionately falls on the formal sector, while the informal sector, which includes a significant portion of the population, often evades taxes.
“As far as I know, paying taxes is within our constitution and law. When those people come to our tax bracket maybe those 3 million people (in the formal sector), we will be able to lower the income taxes for them,” he stated.
My attention has been drawn to media reports that my comments on Virtual ETRs at the KRA Summit yesterday were directed at MPESA only. This is erroneous as I meant all Payment Service Providers including Telcos and Banks. Its an industry issue. Just like we will automatically…
— Hon.Moses Kuria,HSC (@HonMoses_Kuria) October 10, 2024
The government’s initiative aligns with Treasury Cabinet Secretary John Mbadi’s recent call for KRA to innovate and expand the tax base. Mbadi stressed the importance of leveraging technology to improve tax collection and compliance across various sectors of the economy.
Treasury Cabinet Secretary John Mbadi echoed the importance of technology-driven solutions for tax collection, emphasizing the need for collaboration and partnerships between the government and key stakeholders.
“By working together, we create the conditions necessary for businesses to grow and thrive while ensuring that governments can generate requisite revenues to invest in social services, infrastructure and public goods that uplift the entire population.”
The Kenyan government’s efforts to modernize its tax system align with global trends towards leveraging technology to improve revenue generation and facilitate trade.
