The Kenya Revenue Authority (KRA) has stepped up access to cross-border financial data to track multinational corporations for profit shifting, signalling a shift toward intelligence-led tax enforcement to protect the revenue base.
The strategy focuses on accessing vast pools of global tax information, facilitated by international agreements that allow jurisdictions to share financial data.
Weldon Ng'eno, the KRA Commissioner for Large and Medium Taxpayers, says exchange of data has strengthened the authority’s ability to track where multinationals earn profits and where they pay taxes, helping close visibility gaps that firms have historically exploited.
Kenya is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, a framework that facilitates the exchange of tax information among countries.
“This tool enables Kenya to exchange tax information with over 100 countries,” Mr Ng’eno said.
The flow of data is complemented by the mandatory filing of Country-by-Country Reports (CbCR), which require large multinationals to disclose revenue, profits, taxes paid, and economic activity in every country where they operate. These reports have become a critical tool in KRA’s risk assessment process, enabling auditors to flag inconsistencies and target high-risk taxpayers for further scrutiny.
“Large (MNEs) Multinational Enterprises must file CbCR reports, which enhance risk profiling and transparency as they provide tax authorities with data on global revenue, profit, taxes paid, and economic activity per jurisdiction,” Mr Ng’eno said.
Mr Ng’eno said KRA is increasingly relying on such data-driven approaches to move away from traditional audit methods toward more precise, risk-based enforcement.
Multinationals whose financial patterns raise red flags, such as mismatches between declared profits and actual economic activity, are more likely to face detailed reviews by tax auditors.
The tightening net is also being reinforced through enhanced disclosure requirements, which require companies to declare all related-party transactions in their income tax filings, providing KRA with deeper insight into intra-group dealings such as loans, management fees, and royalties.
Kenya has taken a measured approach to the implementation of fast-changing global tax rules. While the KRA has prioritised the Qualified Domestic Minimum Top-Up Tax (QDMTT) under the Organisation for Economic Co-operation and Development’s (OECD’s) Pillar Two framework, other components such as the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR) are still under review.
The QDMTT is an OECD-aligned mechanism allowing Kenya and other countries to impose a top-up tax on large MNEs with annual revenues over €750m.
The UTPR is part of the OECD global tax deal aimed at limiting multinational corporate tax avoidance by setting a worldwide 15 percent minimum effective tax rate on corporate profits.
Mr Ng’eno noted that not all global tax proposals fully reflect the realities of developing economies, underscoring the need for Kenya to align international commitments with national interests.
“Global tax reform is evolving, and Kenya remains engaged, pragmatic, and law-driven in its implementation,” he said, adding that the authority is focused on adopting measures that safeguard the domestic tax base without undermining the attractiveness of Kenya to investment.
Regional coordination is also emerging as a key pillar of Kenya’s strategy. Through platforms such as the African Union, countries are increasingly seeking to harmonise positions in global tax negotiations to ensure their interests are adequately represented.
“Certain negotiations require coordinated positions through platforms such as the African Union to ensure balanced global outcomes,”Mr Ng’eno said.
The Tax Procedures (Common Reporting Standards) Regulations by the National Treasury, 2023, also grant KRA unrestricted access to information on secret bank accounts held by Kenyans in 106 foreign countries, amid stepped-up purges on tax dodgers and beneficiaries of illicit wealth.
Under the rules, all Kenyan banks, trusts, and other resident financial firms, including local branches of non-resident financial institutions, will be required to report to the taxman information on foreigners’ bank account numbers, names, addresses, residences, Tax Identification Numbers (TINs), date and place of birth, and persons listed as their beneficiaries.
KRA then shares this information with the participating 106 countries, including popular tax havens such as Switzerland, Panama, Cayman Islands, Bermuda, the British Virgin Islands, Mauritius, Jersey, and Monaco, and in turn, receives from them information on Kenyans holding bank accounts in their jurisdictions.
Where bank accounts are held by companies, information on registered owners of the entities will be reported. Also to be disclosed is the amount of money held in the accounts or the value of the accounts and their surrender value if insured.
For custodial accounts, the institutions will be required to report the total gross interest, dividends, and income credited to the accounts during the year and proceeds from the sale or redemption of any financial assets credited to the accounts.
