The Kenya Revenue Authority (KRA) plans to install a new system that will receive and analyse information from more than 130 countries in its latest push to uncover cross-border tax cheats.
KRA says the system will strengthen the sharing and processing of information with other tax jurisdictions in the world to benefit from the over 130 information exchange partners that the country currently has.
The taxman says it had been receiving large amounts of data from its partners to analyse and unearth tax evasion but has been overwhelmed, leading to delays in processing the data, which results in revenue loss.
The KRA is now looking for a consultant to supply and install an exchange of information system that will among other things auto-generate email notifications every time there is a receipt of data in the Organisation for Economic Co-operation and Development (OECD) common transmission system (CTS) and keep track of the progress on every request.
The system will ensure the automatic exchange of information and country-by-country reporting as well as allow the KRA to exchange tax rulings information on different firms and individuals.
“There is a need for a system that will integrate the pool of information provided by partner jurisdictions via the OECD common transmission system,” says KRA in a tender document.
“There is also a need for better tracking of requests made from our partners or by the Competent Authority Office (CAO). There is also a need for an efficient (fast) and effective (accurate) way of reporting.”
The KRA also says the system will ensure better security in the transmission and storage of data between it and other tax jurisdictions.
Currently, the KRA’s CAO in the intelligence, strategic operations, investigations and enforcement department processes all the incoming and outgoing requests for information from its partners.
The process is largely manual, requiring the KRA staff to keep such records on spreadsheets, with specific officers assigned to keep track of the status of requests.
“Because of the large number of partners, there have been a lot of requests from our partners and also a large amount of data received to analyse. This has also led to delays in obtaining data, which has led to revenue loss,” says the KRA.
The installation of the system will mark the latest development in KRA’s fight against tax cheats given the growing linkage between Kenya’s financial operations with the rest of the world.
The taxman, under the seventh corporate plan, identified the use of cross-border tax avoidance schemes as one of the strategic risks that could hamper revenue growth.
