The Global Tax program supported a technical mission to the Kenya Revenue Authority (KRA) in Nairobi from January 22nd to 26th through the Piloting and Evaluating Enforcement, Facilitation and Trust (EFT) Based Strategies to Improve Tax Compliance project.
Collectively, meetings were conducted with around 40 officials from the following divisions within the KRA: Strategy, Innovation and Risk Management, Domestic Tax Department, Intelligence and Strategic Operations Investigations and Enforcement Department and Marketing and Communication. This mission is part of a two- and half-year collaboration between the KRA and the World Bank focusing on ways to address the challenge of low tax compliance among Micro, Small and Medium-sized Enterprises (MSMEs) in Kenya.
The mission facilitated detailed analysis of the current features of the turnover tax system, how they impact equity and efficiency and allowed for the team to provide policy recommendations to KRA management. In addition, the mission enabled preparation of a pilot intervention to improve turnover tax compliance through SMS communication with taxpayers.
The lessons learned from the pilot will inform the design of a larger intervention, expected to be launched in March 2024 and then scaled up nationwide in subsequent months. This technical assistance provided to the KRA by the World Bank team will help to inform improvements in tax policy and administration that can be implemented next financial year.