RemarksbyAg.Commissioner,BSTEMduringtheDisseminationof the Profit Shifting Study by United Nations Economic Commissioner for Africa, at 2:00 pm on 20th November 2025 in the23rd Floor Boardroom, Times Tower
Multinationals and Their Role in Kenya's Economy
Distinguished guests, colleagues, and the UNECA team, Good morning and welcome to the Kenya Revenue Authority.
Multinational Enterprises (MNEs) are entities that operate across two or more countries and are central players in the global economy - contributing significantly to production, investment, innovation, employment, and trade. Their activities are not only global but deeply embedded in national development pathways.
Kenya, as a leading economic hub in East Africa, hosts a substantial number of MNEs. As of 2025, we estimate that there are approximately 2,400 active foreign MNEs operating in the country. These entities span critical sectors such as digital services, ICT, construction, manufacturing, finance, and insurance. Prominent examples include Google, IBM, Uber, Coca Cola, Mastercard, among others.
Collectively, these firms contributed Kshs. 58.5 billion to the exchequer in FY 2024/25 - roughly 2.5% of total domestic revenue. Beyond taxes, MNEs play a crucial role in shaping Kenya's economic transformation through employment creation, capital investment, and technological spillovers. They also act as catalysts for infrastructure development, skills transfer, and participation in global value chains.
As Kenya's economy expands, especially in agro-industrial, service, and manufacturing sectors, the role of MNEs will continue to grow - offering both opportunity and complexity in how we manage revenue mobilization and policy oversight.
Profit Shifting and the Value of Technical Collaboration
At the same time, MNEs present unique policy and compliance challenges - particularly through profit shifting practices that erode the domestic tax base. These practices, though often legal in structure, can undermine equity, efficiency, and sustainability in tax systems. Understanding and addressing profit shifting requires deep technical work, robust data, and coordinated analysis across multiple domains.
We commend the United Nations Economic Commission for Africa (ECA) for its consistent support in strengthening the evidence base for domestic revenue mobilisation. The recent study - conducted jointly with the University College Dublin - represents a commendable effort to apply administrative tax data to identify patterns of potential base erosion by multinationals operating in Kenya.
This is a highly technical area of analysis, and the model developed offers practical value to audit, risk, and policy teams within KRA. The use of real tax return data, combined with empirical benchmarks, gives us a tool to prioritise audit resources and support ongoing policy dialogue - both domestically and at the international level.
We appreciate ECA's investment in this work - not just through the study, but also through capacity building, peer exchange, and knowledge transfer. As KRA, we are committed to engaging in deeper collaboration - both on this subject and in other areas of tax policy, administration, and analytics where evidence can drive reform.
We sincerely thank Professor Ronald Davies of the University College Dublin for his outstanding contribution to this study and for his continued support in building internal capacity, particularly through tomorrow's technical sessions aimed at equipping our departmental teams with practical skills for profit-shifting risk analysis.
Thank you once again for your partnership. We look forward to today's exchange and reaffirm our full support to future technical cooperation.