Taxman earmarks Sh31m to acquire intelligence gathering system


Times Tower, the Kenya Revenue Authority offices. PHOTO | NMG

The Kenya Revenue Authority (KRA) is set to buy a Sh31.19 million intelligence gathering system, as it steps up its war on tax evasion.

The budget item was revealed in its annual procurement plan for the year to June and comes at a time the taxman is beefing up efforts to seal tax leakages and meet revenue targets.

KRA is betting on intensified intelligence gathering to crack down on tax cheats and bring more individuals and firms into the tax bracket.

“Our revenue mobilisation will focus on the implementation of the tax base expansion programme, data-driven compliance, and robust intelligence gathering and utilisation, KRA Commissioner-General Githii Mburu said earlier.

The KRA has in recent months ramped up the fight on tax cheats and rolled an amnesty programme for tax cheats, prompting the need to scale up its intelligence gathering at a time of increased scrutiny on businesses.

Beefing up of KRA’s intelligence system has in recent times seen the taxman identify an estimated Sh259 billion in the hands of tax cheats.

Purchase of the system comes at a time the taxman has stepped up the war on tax evasion by posting staff at factories producing excise tax-covered goods such as beer, wines, and spirits, cigarettes, and juices as part of efforts to curb tax cheats.

Businesses from last year started installing new electronic tax registers connected to the KRA systems for monitoring daily sales, escalating the war on tax cheats.

The taxman has already flagged businesses for filing fictitious Value-Added Tax (VAT) invoices to evade paying taxes and faking invoices to inflate purchases of inputs in a bid to cut their VAT obligations.

KRA last year disclosed that it had identified 1,309 firms and wealthy individuals that owe it Sh259 billion, adding that it is conducting further investigations to determine the punishment to be meted.

The taxman in January rolled a three-year programme that will see businesses and individuals get up to 100 percent relief on interest and penalties on taxes that have not been paid in the last five years.