Taxman to use drones for surveillance on businesses

The Kenya Revenue Authority (KRA) plans to purchase high-end drones to bolster its tax surveillance of businesses. The taxman said it seeks to commission two unmanned aircraft systems for aerial scrutiny.

“The Kenya Revenue Authority invites bids from eligible candidates for supply, delivery, testing, and commissioning of two unmanned aircraft systems for aerial surveillance,” said KRA.

Unmanned aircraft systems (UAS) are currently popular with tax agencies around the world who use them to inspect the correctness of tax returns or catch smugglers.

Data captured from drones can, for example, be used by tax inspectors to determine whether property owners have correctly valued their homes for the purposes of property taxation.

The drones will add to a series of new tax surveillance systems that will hand the State real-time access to financial data including sales returns for scrutiny. KRA last month announced installations of flow meters and CCTV cameras in alcohol factories in a bid to tighten supervision — guaranteeing the taxman round-the-clock data on operations of manufacturers to curb tax evasion.

The mass custody flow meter will track high volumes of alcoholic beverages produced to maximise excise tax collected.

Payment of taxes

CCTV cameras will also allow the taxman to track what the firms are producing, by relaying data in real-time.

The technology is expected to complement the existing Excisable Goods Management System (EGMS) that facilitates tracking stamps on excisable goods along the supply chain to account for payment of taxes. In a bid to tighten supervision, KRA also announced that all electronic tax registers (ETRs) machines are required to be connected to its systems for monitoring daily sales.

The two systems will give KRA a view of goods as they leave the production line to the point of exchange between retailers and consumers collecting what is due at each point along the supply chain.

The law requires all businesses with an annual turnover of at least Sh5 million to have ETRs. Under the new system, the KRA will receive sales and invoice data from all registered firms and traders daily in a fresh push to boost revenue collections and curb tax evasion.

Traders will also be required to seek the taxman’s permission to perform any other business the next day under the system, meaning incorrect or incomplete data logged the previous day could lock them out.

Internet-enabled ETRs come with several unique features. For example, it captures the personal identification number (PIN) of the gadget’s buyer. This is, however, optional when generating an invoice and is only applicable where a purchaser intends to claim input tax for the VAT paid.