The Kenya Revenue Authority (KRA) is embarking on a significant technological transformation to enhance its tax administration processes. As part of its mission to improve service delivery and increase tax compliance, KRA is integrating advanced technologies like application programming interfaces (API), machine learning (ML), artificial intelligence (AI), and data analytics into its operations.
Under the leadership of National Treasury Cabinet Secretary, John Mbadi, KRA is intensifying its modernization efforts to streamline tax processes and boost revenue collection. Mbadi recently emphasized the importance of keeping the tax system updated to facilitate smoother business operations and simplify tax transactions.
“Our modernization journey must align with our objectives and those of taxpayers. This approach will not only benefit taxpayers but also significantly boost our revenue mobilization efforts,” said Mbadi.
Expanding the tax base is a strategic priority for KRA as the country faces economic challenges that demand increased tax revenue to support growth and development. Mbadi highlighted the need to focus on sectors that have traditionally been difficult to tax, ensuring a more equitable distribution of the tax burden and protecting existing businesses from undue taxation.
He pointed out that technology is central to reforming taxpayer services, making operations more efficient, and increasing revenue. “Our commitment to this cause is evident in our national strategic policy reforms and the ongoing modernization of revenue administration processes,” he added.
Mbadi also called on KRA to widen its tax net, particularly in areas that have been challenging to tax, to protect existing businesses from unfair tax burdens. He assured that the National Treasury would support KRA by developing policies that guide revenue collection, including the National Tax Policy, which aims to make the tax system more equitable and predictable.
“Through the Policy, the KRA must ensure that we achieve higher tax compliance, enhance the taxpayer experience, and reduce tax expenditure to minimize market distortions and tax refund pressures. As outlined in the Policy, we shall develop a framework for granting tax incentives that are time-bound and growth-oriented,” Mbadi said.
He also emphasized the importance of technology in achieving the government’s Medium-Term Revenue Strategy (MTRS), which aims to improve revenue and reform the tax system. “I will in the course of the fiscal year chair the meeting of the Steering Committee on the Implementation of the Medium-Term Revenue Strategy to ensure we are all on track. The objective is to achieve a tax-to-GDP ratio of 20 percent over the medium term,” he added.
KRA Commissioner General, Humphrey Wattanga, echoed Mbadi’s sentiments, underscoring KRA’s commitment to upgrading its IT infrastructure to create reliable systems that meet the demands of modern business environments. According to Wattanga, the integration of advanced technologies like AI, ML, and data science will be crucial in enhancing KRA’s operational efficiency.
“The adoption of cutting-edge technologies, such as data science, machine learning, and Artificial Intelligence (AI), will strengthen our operational efficiency, ensure compliance, and elevate service delivery standards,” said Wattanga. He noted that these technological advancements would not only simplify tax administration but also boost overall revenue performance and create a seamless experience for taxpayers.
KRA’s modernization efforts have already yielded positive results, with a revenue collection increase of 11.1% in the 2023/2024 financial year, up from 6.4% the previous year. This growth is largely attributed to new technological solutions that have streamlined tax processes, supported trade, and encouraged greater voluntary compliance.