The Kenya Revenue Authority (KRA) has announced plans to introduce geolocation tracking in its electronic tax system to deal with fake invoices that have been costing the country billions of shillings.
Speaking during an interview on NTV on Tuesday, KRA Commissioner George Obell said the new feature will allow the authority to see the exact physical location where every electronic invoice is generated.
The system will be integrated into the Electronic Tax Invoice Management System (eTIMS), which businesses are required to use.
Obell said the move is meant to expose fraudsters who hide behind briefcase companies and operate several shell firms from one address.
“The other thing that we’ve got to do, which is very important and is done in other countries, is geolocation of where the invoices are being issued. That is very important because it will point out where these things are happening,” he said.
Since January 1, 2024, all businesses have been required to support their expenses with a valid eTIMS invoice if they want those expenses considered for tax deductions. This has made the integrity of invoices a key part of the tax system.
But according to KRA, some individuals have been using stolen identity details to register fake companies. These firms then generate fictitious invoices which are used to reduce tax bills illegally. In some cases, several of these suspicious invoices have been traced back to the same location — a red flag that organised fraud could be involved.
The scheme, often referred to as missing trader fraud, has been a major headache for the authority.
Obell said the geolocation tool is already under development. It will be rolled out after consultations with stakeholders and once the necessary system upgrades are complete.
KRA is also working on a stock management module within eTIMS. The tool is meant to ensure businesses only issue invoices for goods they have actually bought or manufactured.
The module had been temporarily switched off to give taxpayers more time to onboard to the system, but the authority is now preparing to fully activate it. At the same time, KRA has drafted simpler compliance guidelines and is collecting feedback before finalising them.
Obell made it clear that the focus is shifting from reacting to fraud to preventing it.
“We don’t wait for mistakes to happen. We want to make sure that they don’t happen in the first place,” he said.
If fully implemented, the new measures could significantly reduce invoice fraud and seal some of the loopholes that have been draining public revenue.
