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Nowhere to hide: Big Data making the world too small for tax cheats

Monday October 7 2019

Kenya Revenue Authority

Kenya Revenue Authority Commissioner General James Mburu addresses journalists after touring Embakasi Inland Container depot on August 21, 2019. Comprehensive data gathering from other government agencies is set to give KRA more muscle in the war against tax evasion. PHOTO | COURTESY 

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Comprehensive data gathering from other government agencies is set to give the Kenya Revenue Authority more muscle in the war against tax evasion and bring more earners into the tax bracket.

Save for telcos who had cited privacy violations in sharing mobile money transactions details, the Nation has learnt that other agencies such as Kenya Power, banks, the National Transport and Safety Authority as well as other records officers aligned to individual and company economic activities have been sharing data with the taxman.


Data on how many electricity meters one owns from Kenya Power is enough to arouse a rental tax demand from KRA while comparing the number of car logbooks one has registered with NTSA with the tax filing of an individual will raise questions should the two fail to make sense.

Doctors who file nil returns will have questions to answer when insurance payout data show they have been making income.

Contractors too have no place to hide with records on projects they register at the National Construction Authority which specifies, among other details, the value of the project and professional fees.


It is now impossible to open a new bank account without a valid KRA PIN and banks have been asking customers to update their PIN details, signalling their entry into the information sharing scheme. Data is making the world too small for tax evasion in Kenya.

The approach, according to KRA officials, makes it easy to harness more taxpayers and targeting specific individuals suspected of ‘misdeclaring’ as efforts to harness revenues for the government enters a new high.


KRA chief manager in charge of knowledge management and innovation Cosmas Kemboi told Sunday Nation in an interview that the strategy has been a success for the taxman, particularly on bringing aboard evasive landlords.

“The use of data for tax purposes boosted collection from the real estate alone by 41 percent and the data centre now gives us a 360-degree view of a taxpayer making it hard to misdeclare. All one has to do is to declare the true income and pay full tax on it, no one will follow you. The understanding we have with the agencies is that the data shared is used for tax purposes only and nothing more,” Mr Kemboi said.


The taxman is relying on the Tax Procedures Act that compels institutions and persons to submit third party returns, upon being required to do so by the commissioner.

Telcos, which had been targeted to share data on mobile money transactions, especially on the business platforms with pay bills and till numbers, have previously opposed the move and KRA is said to be in discussion with the firms to access the information as well.

The use of data to assess individuals and companies for taxes even becomes easier with the digitisation of other government operations including payments through the Integrated Financial Management Information System (Ifmis). Those doing businesses with counties cannot escape with the Ifmis now integrated with KRA’s i-Tax.


Data sharing in the era of fast growing gig economy will be a game-changer for KRA which finds it very hard to estimate incomes from individuals involved in multiple income-generating activities.

Also on the taxman’s radar are the online traders whose tax compliance have been shaky since they do not have any particular locations where their compliance can be enforced.

“We have been working on a plan that will see us acquire a digital tax collection service to facilitate the collection of tax from these businesses. We have already advertised for it and we are receiving expression of interests,” Mr Kemboi said.

KRA plans to have at least seven million more tax payers on its systems by end of June 2021 after the tax base grew to 50.5 million people in the year ended June 2019.