The Kenya Revenue Authority (KRA) is planning a major change in how it calculates taxes. Instead of relying on individuals and businesses to declare what they earn, a new proposal would give KRA the power to figure out tax bills using collected data. This means the old system of self-reporting will be replaced by a more direct, automatic method to ensure correct taxes are paid.
To make this happen, KRA will use information from several reliable sources. A major source will be the electronic Tax Invoice Management System (eTIMS), which tracks business sales and receipts. KRA will also look at payroll records from employers and withholding tax details to monitor regular salaries and extra income from contracts or services.
The plan also involves collecting information from outside groups. KRA intends to compare its records with data from third parties. This will likely include banks, mobile money services, motor vehicle registries (NTSA), and land registries. In addition, the tax authority will use tips from whistleblowers to build a complete picture of a person’s or company’s true wealth and income.
Because of this change, tax bills will be created automatically. KRA’s systems will estimate how much tax is owed based on all this collected data, even before the usual tax filing season begins. If a taxpayer disagrees with the amount KRA demands, the taxpayer will have to provide solid proof to show that KRA’s calculations are wrong.
For the government, this proposal is a step to collect more money, stop tax evasion, and include more people in the tax system without needing to do physical audits. For the public and businesses, it means that financial activities will be more visible to the government. All major financial moves will be closely tracked to ensure that everyone follows the tax laws.
