KRA targets VAT as top revenue source with a bold digital overhaul aimed at transforming Kenya’s tax landscape. The Kenya Revenue Authority (KRA) is spearheading a tech-driven strategy to make VAT its most dependable and largest collection category—ushering in real-time oversight, fraud prevention, and a broader tax base.
What’s Driving the Push
At a recent African Development Bank (AfDB) VAT digitalisation seminar in Nairobi, KRA Commissioner for Medium & Small Taxpayers, George Obell, highlighted the authority’s ambitious goal: “Transform VAT into our most reliable—and highest yielding—tax head.” To achieve this, KRA is rolling out electronic systems like e-Filing, e-Invoicing, and eTIMS
eTIMS in Action
The Electronic Tax Invoice Management System (eTIMS) is central to KRA’s ambition:
- Real-time data flow enables instant monitoring of transactions
- Automated checks reject fake or unsupported VAT claims
- Loopholes are sealed, curbing common fraud schemes
This innovation mirrors efforts across East Africa—Uganda introduced a similar system (EFRIS) and saw VAT revenues rise by nearly 50%
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Results So Far
Recent data confirms the positive trend:
- By end-May 2025, KRA collected KSh 32.14 billion in VAT—a 16% year-on-year increase, exceeding targets by over KSh 1 billion
- In FY 2022/23, eTIMS helped KRA exceed its domestic VAT goal, collecting KSh 314.16 billion—a 15.3% rise over projections
Regional Significance
Kenya’s VAT digitalisation serves as a model for Africa:
- Implementations in Uganda, Tanzania, and South Africa show that digital VAT systems increase transparency, boost revenues, and close compliance gaps
- Local businesses benefit from streamlined processes, reduced bureaucracy, and standardized compliance checks
Challenges & Next Steps
KRA acknowledges ongoing hurdles:
- Ensuring small-scale and informal traders are onboarded effectively
- Investing in training, systems, and public awareness to support digital uptake
- Exploring new technologies like AI and blockchain to detect evasion and protect revenue streams
Commissioner Obell stressed that regional collaboration and continuous innovation are key to sustaining KRA’s revenue growth.
With its strategic digital approach, KRA targets VAT as top revenue source, turning it into a high-efficiency, fraud-resistant engine for national financing. As Kenya solidifies its position at the forefront of e-tax innovation in Africa, VAT is not just another tax—it’s now the cornerstone of sustainable public revenue.
Read Also: KRA and KEPSA Forge Strategic Alliance to Boost Voluntary Tax Compliance in Kenya
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