The Kenya Revenue Authority (KRA) is preparing to introduce advanced technology to strengthen tax compliance and detect tax evasion across the country.
The planned system, which will rely on artificial intelligence and machine learning, is designed to analyse large amounts of financial data and identify taxpayers who may be underreporting income or avoiding taxes.
Although reports recently suggested the system had already been rolled out, KRA has clarified that the tool has not yet been officially launched. The authority said any major developments will be communicated through its official channels.
What the new system will do
The new system, known as the Intelligence Analysis Tool (IAT), will help KRA analyse financial information from different government and institutional databases.
According to the tax authority, the platform will act as a central intelligence system capable of reviewing massive datasets from multiple third-party sources.
Among the institutions expected to provide data is the Business Registration Service, which holds information about registered companies and business ownership.
By linking these databases, KRA will be able to compare declared income with other financial records to identify inconsistencies.
For example, if a business reports low earnings but records show high transaction volumes, the system could automatically flag the account for further review.
Why KRA wants the technology
Kenya has long struggled with a large tax compliance gap, where many individuals and businesses either underdeclare their income or fail to file tax returns altogether.
To address this challenge, KRA has been exploring ways to modernise its tax administration system.
The adoption of artificial intelligence is expected to make tax collection more efficient by shifting from manual investigations to data-driven analysis.
Automated systems can review millions of records much faster than human auditors, allowing the authority to detect unusual financial patterns that may indicate tax evasion.
KRA believes this approach will improve revenue collection while reducing opportunities for human error and corruption.
Phased rollout of the system
While the system has not yet been officially launched, KRA previously indicated that the rollout would happen in phases.
The first phase involves automated validation of tax returns, particularly for filings made in 2025.
The next stage is expected to introduce AI-powered cargo scanners at ports to monitor imports and exports more effectively.
These scanners will help authorities detect goods that may be undervalued or misdeclared in order to evade taxes and duties.
Full deployment of algorithm-based enforcement across more sectors is expected to happen gradually between late 2026 and early 2027.
Addressing public concerns
Some Kenyans have expressed concern that the new system could involve surveillance of social media or personal digital activity.
However, KRA officials have dismissed these fears.
George Obell, Acting Commissioner of the Micro and Small Taxpayers Department, stated that the authority does not monitor individuals’ social media platforms.
Instead, the focus is on analysing official financial data already available to government institutions.
KRA maintains that the goal of the new technology is to improve fairness in the tax system by ensuring that everyone pays their share.
If successfully implemented, the AI-based system could mark a significant shift in how Kenya detects tax evasion and manages revenue collection.
