‪KRA To Have Direct Access to Government Contractors’ Bank Accounts and Monitor Their Transactions from July‬

In what the Treasury describes as a watershed moment in the fight against corruption, the Kenya Revenue Authority (KRA) will gain unprecedented access to government suppliers’ bank accounts starting July 2025.

This move comes as part of a comprehensive electronic government procurement system (e-GP) that aims to revolutionize how the state conducts business with private entities.

Treasury Principal Secretary Chris Kiptoo announced yesterday that the new platform will create direct links between procurement systems, the KRA, and banking institutions.

This integration will give tender evaluation committees complete visibility into the financial activities of companies bidding for government contracts.

The Principal Secretary National Treasury Chris Kiptoo

“We will link every supplier to KRA for a tax compliance certificate and to your bank for a statement. So there will be no monkey business where you go to, say River Road, and print some fake bank statement and come and use it to bid or get some fake tax compliance certificate,” Dr. Kiptoo said during an appearance on the “Fixing the Nation” show.

Targeting Tax Evaders and Fraudulent Suppliers

The primary targets of this initiative are tax evaders and shell companies that have historically exploited loopholes in the government procurement process. Officials believe the system will help identify:

– Companies that inflate their financial capacity to win government tenders
– Shell firms using fraudulent documentation
– Businesses involved in tax evasion
– Suspicious transactions linked to money laundering or terrorism financing

The Treasury estimates that approximately Sh2.5 trillion in government contracts will be processed through the new system in the next financial year, representing a significant portion of the Sh4.24 trillion national budget.

According to Dr. Kiptoo, similar e-procurement systems in other countries have reduced procurement costs by 10-15 percent.

If Kenya achieves even a 10 percent reduction, taxpayers could save around Sh250 billion annually.

“Procurement of [government] goods tends to be overpriced. If we all go into this system and you can see who is bidding and at what price, we expect prices to come down,” Dr. Kiptoo explained.

The e-GP will be fully integrated with the Integrated Financial Management Information System (IFMIS), which processes payments to suppliers and contractors, creating an end-to-end digital procurement solution.

Privacy Concerns and Resistance

The new system arrives amid broader efforts to expand KRA’s surveillance powers.

The Finance Bill 2025, currently before Parliament, includes provisions that would allow the tax authority to access all transactional data, including personal information and trade secrets, without requiring court approval.

Dr. Kiptoo acknowledged that implementation won’t be smooth sailing.

“We are going to fight because there are those who are going to resist because it is not going to be an easy space for those who have never wanted to do things properly,” he said.

Banking industry insiders have previously expressed concerns about customer data protection when similar KRA integration plans were proposed earlier this year.

The e-GP marks the end of the largely manual procurement processes that have been associated with numerous corruption scandals, including the Covid-19 medical supplies controversy at the Kenya Medical Supplies Authority and questionable edible oil imports by the Kenya National Trading Corporation.

“All suppliers who deal with the government must register on that portal. We will not do any business with the government in the manner we have been doing,” Dr. Kiptoo emphasized.

The system is currently in pilot phase with selected state entities and three counties.

Training for procurement staff across ministries, departments, agencies, and county governments is already underway.

Corruption in Kenya’s public sector has previously been estimated to consume about one-third of the annual budget, potentially reaching Sh1.4 trillion in the coming fiscal year.

President William Ruto has placed anti-corruption efforts at the center of his administration’s agenda, stating last November: “Of the many difficult assignments I have undertaken, this fight against corruption is one I now take on with resolve going forward.”

As the July implementation date approaches, government contractors and suppliers have just weeks to prepare for this new era of financial transparency.