Kenya's Financial Landscape: Data Sharing, Tax Reforms, and IMF Adjustments - News Round-Up

𝐖𝐞𝐥𝐜𝐨𝐦𝐞 𝐭𝐨 T𝐨𝐝𝐚𝐲’𝐬 M𝐨𝐧𝐞𝐲 N𝐞𝐰𝐬 R𝐨𝐮𝐧𝐝 U𝐩: 𝗧𝘂𝗲𝘀𝗱𝗮𝘆, 𝐍𝐨𝐯𝐞𝐦𝐛𝐞𝐫 𝟱, 𝟐𝟎𝟐𝟒‍

𝗞𝗥𝗔 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 𝘄𝗶𝘁𝗵 𝗧𝗲𝗹𝗰𝗼𝘀

The Kenyan government has announced a data-sharing agreement with telecommunication companies to improve tax compliance as per the Standard. This partnership allows telcos to share real-time mobile money transaction data with the Kenya Revenue Authority (KRA) to boost revenue collection. The initiative is part of a wider strategy to use data analytics for managing tax risks, as outlined in a brief to the International Monetary Fund (IMF). 

Read Also: Treasury's Rain of Taxes & Mergers in Kenya's Banking Sector - News Round-Up

𝗜𝗠𝗙 𝗨𝗿𝗴𝗲𝘀 𝗞𝗲𝗻𝘆𝗮 𝘁𝗼 𝗔𝘃𝗼𝗶𝗱 𝗗𝗲𝗲𝗽 𝗕𝘂𝗱𝗴𝗲𝘁 𝗖𝘂𝘁𝘀, Backs 𝗡𝗲𝘄 𝗧𝗮𝘅 𝗠𝗲𝗮𝘀𝘂𝗿𝗲𝘀

The BusinessDaily reports that the IMF has warned Kenya against deep budget cuts in critical areas like health and education, advocating for fiscal consolidation through new tax measures instead. Kenya has now proposed tax measures from the withdrawn Finance Bill, 2024, aimed at raising Ksh137 billion, but these may still be insufficient, leading to a second supplementary budget expected by early 2025.

𝗕𝗮𝗻𝗸𝘀 𝗘𝘅𝗽𝗹𝗼𝗶𝘁 𝗖𝗕𝗞 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁 𝗪𝗶𝗻𝗱𝗼𝘄 𝗳𝗼𝗿 𝗣𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗹𝗲 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 

As per the BusinessDaily, Kenyan banks have increasingly used the Central Bank of Kenya’s (CBK) discount window, intended for emergency liquidity, to fund profitable investments in government securities, exploiting lower CBK rates versus Treasury yields. The IMF has raised concerns over banks' reliance on this facility, as it’s meant for last-resort funding. The CBK monitors banks that frequently access the window and continues to enhance their liquidity.

𝗞𝗲𝗻𝘆𝗮 𝗥𝗲𝗾𝘂𝗲𝘀𝘁𝘀 𝗥𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗶𝗻 𝗜𝗠𝗙 𝗔𝗰𝗰𝗲𝘀𝘀 

Nation: Kenya has asked the IMF to cut its access to funds by Sh37.6 billion, reducing it to Sh188.4 billion. This request is due to less pressure on spending and new financing options, which the IMF approved. The change comes after Kenya successfully raised funds through a Eurobond, Trade Development Bank financing, and a World Bank loan. Kenya also wants to delay some of its remaining IMF funds until the program ends in April 2025. 

𝗡𝗲𝘄 𝗞𝗥𝗔 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗠𝗼𝗯𝗶𝗹𝗲 𝗗𝗲𝘃𝗶𝗰𝗲 𝗜𝗺𝗽𝗼𝗿𝘁𝘀 

From January 1st, 2025, KRA will require:

1. Importers to submit import details, including IMEI numbers
2. Local manufacturers to register on the KRA portal and report all assembled devices 
3. Incoming passengers to declare devices for use in Kenya, with IMEI details

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