Revised law weakens role of KRA independent directors
Kenya Revenue Authority commissioner-general John Njiraini (left) with chairman Marsden Madoka during the launch of Taxpayers Month in Nairobi last October. PHOTO | FILE
What you need to know:
New Finance Act paves the way for government to push through its agenda at agency.
The Kenya Revenue Authority (KRA) board will only need two independent members to reach a decision after a change in the law that will weaken the role of directors who are not government employees.
The change made through the Finance Act has altered the board’s quorum — the minimum number needed for it to sit and make decisions — by allowing three ex-officio members to be counted in determining this requirement.
The three ex-officio members — the Attorney-General, the Finance PS and the Commissioner-General — previously did not count in the board’s quorum, meaning that five independent directors had to be present before a decision could be taken.
Ex-officio members are those who sit on the board by virtue of their position in government and not specifically appointed as directors.
“The second schedule to the Kenya Revenue Authority Act is amended in paragraph 2(1) by deleting the words “excluding the ex-officio members,” the Finance Act reads.
The change now means that the board chairman, who is a presidential appointee together with the three ex-officio members and one independent director can sit and make decisions, giving the government power to easily push through its agenda at KRA.
“All questions proposed at a meeting of the board shall be decided by a majority of the votes of the members present and voting, and in the event of an equality of votes, the person presiding shall have a casting vote in addition to his deliberative vote,” the Act says.
Independent directors are typically not expected to have any relationship with the entity they are appointed to and play a watchdog role to ensure disclosures and compliance with the law as well as render independent judgement on issues.
They offer checks and balances to decisions or proposals by the insiders — the government — for the benefit of other stakeholders — the public.
The KRA board comprises 10 members — the chairman, three ex-officio members and six independent board members.
The board is responsible for approval and review of KRA’s policy, monitoring the performance of the taxman and discipline of the members of staff.
The board takes decisions on hiring of senior officers, approving the budget, sale and purchase of property, tender approvals and scrutinising the books of account among others.
The KRA is working to meet a target of Sh1.33 trillion in the current financial year and has been under pressure to tackle corruption and make changes to meet the mark.
Marsden Madoka currently chairs the KRA board.
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