All businesses that land tenders from the government will have their details recorded in an online platform which will link directly to the Kenya Revenue Authority (KRA).
The online procurement system will track all public tenders with an aim to nab tax cheats who fail to remit to the taxman upon getting orders that can be worth up to billions of shillings.
The system will be implemented after Treasury CS Ukur Yatani allocated Ksh284 million in the budget for the year starting July 1.
Tax evasion has been highlighted as one of the top crimes denying the tax agency revenue and it has been pursuing suppliers earning billions from counties and state tenders who do not pay their taxes.
The system where all public tenders will be launched and awarded will also be linked to the government's Integrated Financial Management Information System (IFMIS), the Registrar of Companies, and the National Council for Persons with Disability for faster verification and flagging of corrupt dealings.
"Under the e-procurement system, all procurement processes will be undertaken on an online platform where benefits will accrue to the government procuring entities in terms of cost reduction, speed, transparency and accountability," Yatani stated in an earlier address.
KRA observed that tax evasion was conducted mainly through faking invoices by suppliers in an effort to avoid duty obligations.
Additionally, some suppliers have been filing nil returns even though they earn taxable income from the state tenders.
County governments, on their part, were found avoiding to submit taxes withheld from suppliers and employees.
The government has unveiled a raft of measures against tax cheats. The Treasury is preparing to institute travel bans and deregister the Personal Identification Numbers (PINs) of tax cheats as part of a guarantee to recover the International Monetary Fund (IMF) loan.
A report indicated that KRA had earmarked a number of individuals who are said to have pending bills of as much as Ksh260 billion.
Among individuals who are targetted are doctors, real estate investors, and lawyers who are self-employed.