National Treasury minister John Mbadi.

Kenya’s revenue collection agency, KRA, is seeking to implement further technological advancements to enhance the country’s tax system and increase revenue collection. This follows a directive from the country’s new finance minister, John Mbadi.

Speaking at a recent meeting with KRA executives and staff, the minister emphasised the need for continuous modernisation in tax administration by leveraging cutting-edge systems to streamline business processes and simplify tax transactions.

The KRA recorded a 11.1% growth in revenue collection for the financial year 2023/2024, up from 6.4 % in the previous financial year. The authority attributed this growth to the adoption of technology solutions that have simplified tax processes, facilitated trade and enhanced voluntary compliance.

Highlighting the transformative power of technology, the minister noted that it is crucial for reforming taxpayer services, improving operational efficiency, and enhancing revenue collection.

“Our modernisation journey must align with our objectives and those of taxpayers. This approach will not only benefit taxpayers but also significantly boost our revenue mobilisation efforts,” Mbadi said.

“Our commitment to this cause is evident in our national strategic policy reforms and the ongoing modernisation of revenue administration processes,” he added.

The minister also urged KRA to expand the country’s tax base, particularly in sectors that have traditionally been hard to tax. This, he stated, will help protect existing businesses from excessive taxation.

Mbadi pledged the National Treasury’s support for KRA, by developing policies to support revenue collection. He said that instruments such us the National Tax Policy will support the expansion of the tax base, as well as encouraging fairness and equity, and creating certainty and predictability in tax rates.

Looking at future technology options, the KRA plans to design and deploy a new technology architecture that will create market-customised solutions, by enabling stakeholders to integrate with KRA’s systems. The revenue authority has also said that it will increasingly rely on data analytics and artificial intelligence, including machine learning.

‘’These technologies will reshape how KRA approaches compliance, by modernising tax processes. The technologies will help improve customer experience, service quality, identify potential tax evasion schemes, and help KRA make informed decisions and formulate data-driven policies,” says the revenue authority.