KRA has to figure out how to tax black economy - FINTECH - has all the tools needed - we have m-pesa and all digital economy. So basically the digitization of all gov services - will improve non-ordinary taxes. Requirement to have e-TIMS will capture VAT.
What will drop is PAYE and Corp taxes. I wouldnt care about corp taxes - time to reduce it to 20% even - we collect little.
But gov has to think about VAT - how to track business using M-pesa paybills who exceed 5M - and get them to pay VAT - maybe withholding VAT.
They need to work with M-pesa and Banks - automatically deduct 16% VAT from any payment to a paybill if you total revenue exceed 5 million KES. You can go and claim refunds if you have genuine case.
Heck I would make everything in kenya 16% (or lower) VATable - reduce corporate taxes - reduce PAYE - then ask banks & m-pesa to automatically deduct - 16% of any till number or paybill transaction made - and daily send the money to treasury.
Then make it hard for cash payment to happen - remove big notes - leave only 100shs for paying bus fare and such.
Yes the only game in town is black economy, the informal sector will explode. What does that portend to a government that hopes to collect 3t in taxes?