NAIROBI, Kenya- The Kenya Revenue Authority (KRA) is turning to Artificial Intelligence (AI) to crack down on tax evasion, a move that could revolutionize the way the agency identifies and penalizes tax cheats.
This high-tech strategy comes in the wake of KRA consistently missing its ambitious revenue targets, leaving the government scrambling for new ways to close the gap.
The KRA’s adoption of AI is not just about catching tax evaders—it’s about creating a more efficient, data-driven approach to revenue collection.
KRA’s AI initiative was announced by Commissioner General Humphrey Wattanga during a recent meeting with Treasury Cabinet Secretary John Mbadi.
The new technology is expected to significantly enhance KRA’s ability to detect tax evasion by analyzing massive datasets to uncover patterns that human auditors might miss.
AI will mine through mountains of transaction records, including bank statements, to spot irregularities that suggest underreporting or fraudulent deductions.
As Mr. Wattanga explained, the integration of AI and machine learning into KRA’s systems is a game-changer.
“The adoption of data science, machine learning, and Artificial Intelligence (AI) will strengthen our ability to identify and address potential tax evasion through data-driven decision-making,” he said.
This shift to AI is seen as essential, especially as traditional methods have proven insufficient in meeting KRA’s targets .
The move to AI comes at a critical time for KRA, which recently missed its tax collection target for the 2023/2024 fiscal year.
Despite an 11.1pc increase in overall revenue to KSh 2.407 trillion, KRA fell short of its goal, leaving the agency and policymakers concerned about the underlying issues.
CS Mbadi urged KRA to embrace more innovative and technologically advanced strategies, emphasizing the importance of continuous modernization in tax administration.
KRA’s modernization journey is not just about incorporating AI but also aligning with broader government initiatives, such as the National Tax Policy.
This policy aims to expand the tax base, ensure fairness, and create predictability in tax rates, which could provide a stable foundation for KRA’s new AI-driven strategies .
KRA’s embrace of AI marks a significant step forward in the agency’s battle against tax evasion. By leveraging cutting-edge technology, KRA hopes to boost its revenue collection efforts and ensure that all taxpayers contribute their fair share.
