The Kenya Revenue Authority (KRA) is set to launch a new digital tax validation system using artificial intelligence to combat fraud and improve revenue collection, starting January 10, 2026. Integrated into the existing iTax platform, this system will automatically flag discrepancies in income declarations, VAT claims, and withholding data, leveraging real-time cross-checks against third-party records. This initiative aligns with the government’s tax modernization strategy to enhance transparency and compliance, targeting an increase in Kenya’s tax-to-GDP ratio from 14% to 22% over the next seven years. Taxpayers must ensure their expenses are supported by valid eTIMS invoices and that withholding tax data matches their declarations. Any inconsistencies could lead to audits or rejected returns. Small businesses may face initial challenges due to digital record-keeping requirements. KRA emphasizes that proper documentation will significantly reduce tax evasion, urging taxpayers to digitize records and reconcile invoices ahead of deadlines.
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