Why Kenya’s taxman is eyeing social media

Picture this: you’re having a great Christmas holiday at a fabulous location abroad. You walk into a fancy restaurant and order an exquisite meal.

And because you have a loyal band of followers on social media, you decide to take good pictures of the sumptuous meal and share them.

How else would people know that you’ve eaten food that your village mates have never seen in their lives and whose name even you cannot pronounce?

And when you press “share” – the immediate reaction is: “Oooh, mmh, nice! Look at you! Wow!” This is quickly followed by cute comments on how they wish they were there.

But in Kenya there is now another hidden follower, tracking every step you make, every photo you post, every meal you eat, every car you flaunt, every house you show off.

This loyal follower is the taxman.

You see, the Kenya Revenue Authority (KRA) has confirmed that it uses communication technology to enforce tax compliance.

This includes blockchain, artificial intelligence, machine learning and data mining technologies.

“KRA has a dedicated team whose work, apart from other intelligence-led risk-based analysis, is to look at lifestyles of targeted taxpayers.

“This may in some instances involve viewing the social media profiles of targeted individuals,” a KRA spokesperson admits to me.

“Isn’t this an infringement on people’s privacy?” I ask.

“No,” says the authority: “The KRA does not infringe on anyone’s right of privacy as what they post is for public viewing and in public social media.”

I decide to push the taxman some more.

How does the KRA go about reconciling someone’s lifestyle – as portrayed on social media – with their tax compliance? After all, the property or goods they show online may not actually belong to them.

Well, it turns out the taxman has a very effective media monitoring team that scans the landscape to see if what we are flaunting flouts the tax declaration rules.

“KRA can then check whether the declared sources of income and taxes paid are commensurate to the portrayed lifestyle. Also note that KRA is enabled to access and exchange information with other government agencies through the Multi-Agency Team framework.”

That sounds scary. Actually, when the KRA commissioner general said that the authority used technology for tax compliance surveillance, his video clip went viral and Kenyans went bananas to declare their wealth.

And the taxman noticed a change.

“There has been a steady rise in the number of individual taxpayers rushing to verify their tax compliance status. Recently, we had more than 60% rise in the number of tax compliance certificates applications lodged on the online i-Tax platform.”

Once the initial shock of a snooping taxman was over, Kenyans sought relief by creating their own humorous media to explain what the taxman was up to.

One of the images that went viral was the picture of a bird peeping through the window of an aircraft in mid-flight and telling a bewildered passenger: “Hey, I’m just checking if your seated business class or economy class.”

The message from the taxman or rather the tax bird is: “If you can afford business class, you can certainly afford to declare a bit more in your tax returns.”

So, what led the KRA to devise these ingenious methods to smoke out tax dodgers or those who are very conservative with the truth when it comes to tax declarations?

Simply put – tax targets.

Ever since Kenya declared its first case of COVID-19 in March 2020, the country has ramped up its public debt by 1.42 trillion Kenyan shillings ($12.5bn, £9.3bn).

Part of the conditions attached to a recent $2.34bn IMF loan to Kenya is that the country raises its tax revenue – hence the taxman is hounding Kenyans online.

A highly placed source tells me the government’s message to the KRA was simple: “You need to raise a lot more revenue by finding two million new tax payers.”

And, guess where the best place to find these people – yep, you got it – on social media!

The taxman immediately went to work and exceeded expectations. In a statement issued in October, the KRA announced that it had overshot its first quarter revenue collection targets by $132bn.

It acknowledged that it received quite a bit of help online.

“Kenyans on Twitter (KoT) among other online content creators who have actively conceptualised witty content on KRA engagements with taxpayers, positively influence tax compliance awareness.”

So as I prepare to capture my big Christmas holiday moment on camera, rest assured that I will be in dirt-cheap T-shirt and jeans, my rugged face framed against a battered bicycle.

I do not want to give the taxman any excuse to place that call.