Digital Monitoring & 4 Other Ways KRA Is Cracking Down on Tax Evaders

The Kenya Revenue Authority (KRA) has intensified its efforts to crack down on individuals and businesses that repeatedly fail to remit their taxes on time.

Appearing before the National Assembly Committee on Finance and National Planning, chaired by Hon. Kuria Kimani on Tuesday, KRA officials stated that tax evasion ranks among the top challenges they face in the course of duty.

Other challenges include legal disputes, enforcement difficulties due to the complexity of various sectors, and the challenges of tracking and taxing online betting and gaming platforms.

In response to the Committee’s inquiry on tax evasion, the KRA outlined several strategies for prevention and ensuring compliance.

These measures include:

1. Digital monitoring - This involves intelligence received from banks, mobile money transactions, and asset registration, among others.
2. Real-time tax remittances
   
   
3. Enforcement actions
   
   
4. Third-party data collaboration
   
   
5. Public awareness campaigns
   
   

The latest available data on the KRA website indicated that in the financial year 2021/22, only 504,036 of the then 759,164 registered taxpayers filed their annual returns. Of these, only 84,428 firms declared and paid corporate tax.

A crackdown conducted by the taxman in September 2024 revealed that 511 companies and individuals were suspected of engaging in tax evasion and fraud, costing the government Ksh79.3 billion.

58 Betting Websites Flagged

During the meeting, officials were also asked to explain the current framework for taxing betting and gaming companies, and to clarify how the Aviator game is classified.

They noted that the applicable taxes for betting and gaming companies include excise duty, withholding income tax, betting and gaming tax, and corporate income tax. The Aviator game is classified as a digital game of chance and is taxed under the same regulations as other betting and gaming activities.

On Tuesday, the Betting Control and Licensing Board flagged 58 betting sites that were found to be operating without licenses.

“Unauthorized betting websites have sparked public outrage by operating without approval from the Board. The Board has taken note of complaints from concerned citizens regarding these platforms, which exploit users by demanding money through betting schemes,” read a letter from the Board directing mobile money companies to cancel paybill numbers associated with the affected sites.

The flagged companies include Cheza Crash, Skai Crash, Crash KE, and Simple Crash. Others include Aviator VIP, Aviator Pesa, Aviator KE, and Luckybet KE, among others.