The Kenya Revenue Authority (KRA) is exploring technologies like Artificial Intelligence (AI) and Machine Learning to analyse vast data sets to identify tax evasion patterns.
Humphrey Wattanga, KRA Commissioner General, says the implementation of Application Programming Interfaces, AI, and machine learning will be pivotal in enhancing revenue mobilization through improved efficiency, accuracy and compliance.
“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.
“We must leverage on the power of the rapid innovation and technological advancements that are driving the global economy. Tax administrations must proactively adopt technology-driven solutions and systems that facilitate trade and improve domestic resource mobilization,” said Musalia Mudavadi, Prime Cabinet Secretary.
“Innovation, from digital taxation platforms that simplify compliance to block chain technologies that enhance transparency in trade logistics, offers powerful tools for revenue generation and efficient trade management.”
We Must Rethink Traditional Tax Rules
Speaking during the 2024 KRA Annual Summit, Mudavadi underscored need to intergrate technology in tax collection noting that from experience, automating customs procedures has significantly reduced cargo clearance times across the East African Community common border points. This has greatly enhanced the movement of goods and facilitated international trade.
Similarly, adopting electronic invoicing systems helps to integrate the informal economy into the formal tax base, widening the scope for domestic resource mobilization.
We must rethink traditional tax rules and be prepared to implement global solutions that ensure all sectors contribute equitably to the national resource base.
Governments should also invest in capacity building and technical skills training for their public servants to fully leverage these technologies and maximize the gains from innovation.
Data analytics, artificial intelligence and machine learning enable tax authorities to identify trends, improve compliance and risk profiling, and forecast revenue with greater accuracy.
Speaking during the opening ceremony of the three-day summit, Cabinet Secretary Treasury, John Mbadi called rooted for collaborative engagements and partnerships with key stakeholders to enable governments develop sound policies that encourage investment, job creation and ultimately economic growth.
“Such engagements, centred on shared goals and a unified vision, are critical to shaping effective policy frameworks and advancing citizen participation in public governance. They also deliver mutual benefits to governments and all 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.”
