KRA To Begin Automated Validation Of Tax Returns

The Kenya Revenue Authority (KRA) has announced plans to introduce a new automated digital system to validate income and expenses declared in tax returns from January 1, 2026 as part of efforts to enhance compliance and seal loopholes in tax collection.

The new automated validation system, set to go live in January 2026, will be integrated into the iTax platform to flag mismatches in income declarations, VAT claims, and withholding tax data. It will also enable the authority to verify filings against third-party information in real time, improving accuracy and compliance.

According to a statement issued on Friday, the initiative forms part of the government’s broader tax modernisation agenda to boost efficiency, transparency, and voluntary compliance.

“Effective 10 January 2026, it will begin validating income and expenses declared in both individual and non-individual income tax returns against the following data sources: TIMS/eTIMS invoices, Withholding Income Tax gross amounts and Import records from Customs systems,” read the notice.

“All declared income and expenses must be supported by a valid electronic tax invoice, correctly transmitted with the buyer’s PIN, where applicable, subject to exceptions provided under Section 23A of the Tax Procedures Act, Cap 469B and the Tax Procedures (Electronic Tax Invoice) Regulations, 2024.”

KRA said the new AI system is expected to enhance compliance and curb tax evasion by ensuring all claims are backed by verifiable digital records. The rollout is part of the government’s plan to embed AI and machine learning into tax administration to increase efficiency in revenue collection.

KRA encouraged taxpayers to request TIMS/eTIMS schedules of their current annual income and expenses from their designated account managers to ensure accuracy before submission.

The tax authority also invited feedback and insights from taxpayers and stakeholders to ensure a smooth rollout of the validation process.