AFRICA: Kenya’s authority to explore AI and machine learning to detect tax evasion

The Kenya Revenue Authority (KRA) intends to use technologies such as Artificial Intelligence (AI) and Machine Learning to analyse massive amounts of data and detect patterns of tax evasion.

According to Humphrey Wattanga, KRA Commissioner General, adopting application programming interfaces (APIs), artificial intelligence (AI), and machine learning will improve revenue collection by making it more efficient, accurate, and compliant.
“AI and Machine Learning will analyse vast data sets to identify tax evasion patterns, optimise resource allocation, and predict future revenue streams. Ultimately, integrating technology will not only boost tax collection but also foster trust and transparency within the tax system,” Wattanga said during the 2024 KRA Annual Summit.

Kenya’s Prime Cabinet Secretary, Musalia Mudavadi, stated that tax administrations should use technology to facilitate trade and improve domestic resource mobilisation.

He added that adopting electronic invoicing systems helps to integrate the informal economy into the formal tax base, widening the scope for domestic resource mobilisation.

Over time, the Kenyan government and KRA have used resources to combat tax evasion by using systems like iTax and the Integrated Customs Management System (iCMS) to ease tax filing and customs clearance.

Advertisement

A 2022 report revealed that 90% of Kenyan companies did not pay corporate tax. Of the 759,164 registered firms, only 84,428 paid their taxes for the year ending June 2022, resulting in a compliance rate of 11.12%.

This call for AI deployment is consistent with Kenya’s move to lead in the technological wave and leverage AI for digital growth.

In April 2024, the Kenyan government and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH collaborated to launch a project to develop a National Artificial Intelligence (AI) strategy.

Toward the launch of the AI Strategy, a meeting among stakeholders was held to identify gaps and opportunities within Kenya’s AI ecosystem, explore ongoing initiatives and partnerships, set priorities for the National AI Strategy, and gather feedback on the strategy’s development.

In September 2024, Kenya announced plans to update its ICT policy for the first time in 26 years. The country’s ICT Sector Working Group (SWG) submitted a key report to the Ministry of Information, Communications, and the Digital Economy on policy and legislative reforms to align Kenya’s ICT environment with global trends.

20 January 2024

EU: EU Tightens Anti-Money Laundering Rules For Crypto Firms To Tackle Illegal Activities

In a landmark move, the European Union’s banking watchdog has ramped up its efforts to combat financial crimes in the cryptocurrency sector. The European Banking Authority (EBA) issued new guidelines,

Read More
19 January 2024

PALESTINE: EU promises support to PA as Israel withholds tax revenues

EU officials met with the Palestinian minister of finance, Shukri Bishara, and the governor of the Palestinian Monetary Authority (PMA), Feras Melhem, to discuss the impact of the ongoing war by Israel

Read More
19 April 2024

HONG KONG: Hong Kong’s spot crypto ETFs have one big attraction: no tax

Hong Kong’s upcoming exchange-traded funds (ETF) that invest directly into cryptocurrencies could be attractive to many Asian investors, industry insiders say, but demand may still be a trickle compared

Read More
29 April 2024

SINGAPORE: Singapore sees fewer new Chinese family offices after money-laundering crackdown

The influx of family offices handling money of Chinese origin has slowed in the wake of Singapore’s multibillion-dollar money-laundering scandal Tighter checks for new applicants are partly to blame

Read More