Kenya Revenue Authority plans to integrate the tax system with leading telecommunication companies in the country in a move to raise more taxes and target evaders.
In the released draft of the 2023 Budget Policy Statement (BPS), the government plans to scale up revenue collection efforts by KRA to Sh3 trillion in the Financial Year 2023-24 and Sh4 trillion over the medium term.
In order to raise more revenue, the government will undertake a combination of both tax administration and tax policy reforms.
"On the tax administrative side, KRA will integrate its system with the Telecommunication companies," the statement read.
The draft also suggests a reduction of the Value Added Tax (VAT) gap from 38.9 per cent to 19.8 per cent of the potential by fully rolling out the electronic Tax Invoice Management System (eTIMS).
The government also plans to expand its tax base in the informal sector.
"The potential taxable base of the informal sector is Sh2.8 billion as per the MSME survey," the statement read.
For the proposal to go into effect, the draft 2023, BPS will be taken to Parliament by February 15, as stated by the law.
"Parliament shall, not later than 14 days after the BPS is submitted, table and discuss a report containing its recommendations and pass a resolution to adopt it with or without amendments."
Afterward, National Treasury and Economic Planning CS Simon Chelugui shall take into account resolutions passed by Parliament in finalising the budget for the FY 2023-24 and the medium term.