KRA data mining from your social media handles. | Ronalds LLP
KRA data mining from your social media handles.

KRA data mining from your social media handles.

It is an understatement to say that data is at the forefront of any business operations. From government operations to the mama mboga, the information about our clients, competitors, suppliers, and business associates is a vital make or break to the success of our business. In the recent past, data mining and analysis techniques have changed considering the quadrillion bites of data available from more additional sources previously regarded as non-traditional. These techniques have taken a turn to include artificial intelligence (AI) techniques to aid in the processing of massive data chunks on a near real-time basis.

Government institutions like the DCI and KRA are not left behind, they have joined the bandwagon to using AI to interrogate data in real-time. Social media sites are the largest source of data on individual enterprises and persons. I would be greatly surprised if such government institutions would ignore this readily available source of data to gain insight into their clients. This is however curtailed under the Kenya’s Data Protection Act (the “DPA”) and any infringement contrary to these provisions can lead to compensations.

KRA is always watching. As you flaunt your hard-earned sweat for the public to see, always remember Caesar will always demand his, and he always has his ways to countercheck your returns. Sadly, some of the “nil returns filers’ have private businesses and yet they have not declared their interest in the business they run. KRA uses lifestyle audit and one of the pointers is your social media platform. This goes beyond the i-Tax portal users to see the big picture and understand the source of the figures versus the lifestyle one leads. This is sometimes called an “economic reality check”; it is usually geared towards unraveling if the taxpayer’s income reflects his lifestyle. KRA may probe the properties, luxurious spending and donations of a taxpayer versus his stated income returns. Social media provides a perfect platform to mine data on most of the tax evaders’ lifestyles as they post their lavish lifestyle oblivious of the hawk-eyed tax man.

According to Section 56 (1) Tax Procedures Act, the burden of proof ultimately falls on the taxpayer to explain any inconsistencies, when a taxpayer is flagged for showing off a lifestyle that is not in line with their earnings.

A case in point is when the South African Revenue Service (SARS) last year flagged 32-year-old luxury car-loving businessman, Thabiso Hamilton Ndlovu, after he bought five luxury cars of about South African Rand 10.5 million at one go and flaunted on social media. This led to a legal battle and tax penalty, this is just but the tip of the iceberg on how social media can be used by revenue authorities to nab the tax evaders.

Will KRA be infringing people’s rights of privacy? Will KRA make significant revenue collections out of social media tax hunt? We understand that a set of procedures and guidelines will be published to manage the way KRA handles the matter associated with people’s social media accounts.

With the launch of the Voluntary Tax Disclosure Program (VTDP), individuals can now take advantage of the window to declare their undisclosed income before the KRA conducts a lifestyle audit on their social media platforms; failure to can lead to prosecution and travel bans. If you need any assistance on your tax compliance we are here to help.

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