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Economy

Uhuru orders lifestyle audit for KRA staff

The taxman has shrugged off revenue collection hiccups for the first quarter of the year to win a Marketing Society of Kenya award. PHOTO | SALATON NJAU
President Uhuru Kenyatta presents an award to Basco Products Kenya Ltd managing director Kamlesh Shah after the firm emerged top in the Best Growth Corporation Tax category at the KICC October 21, 2015. Looking on is KRA commissioner- general John Njiraini. PHOTO | SALATON NJAU  

Kenya Revenue Authority (KRA) employees will be subjected to lifestyle audits as part of fresh efforts to stop rampant corruption in the agency that costs the State billions of shillings in revenue leakages.

President Uhuru Kenyatta issued the directive with firm instructions to the Treasury and the KRA to speed up the formulation of a vetting plan, saying the integrity of the agency’s officials was crucial to ensuring all eligible taxpayers met their obligations and paid in the correct amounts.

“Measures geared towards eradicating corruption in tax collection must be implemented. Towards this end, I am directing the National Treasury to work with the KRA board to ensure speedy implementation of an appropriate staff vetting framework,” Mr Kenyatta said adding that it was important that the taxman ensures all those eligible to pay taxes did so promptly.

The President spoke in the wake of KRA’s failure to meet its revenue targets in the first quarter (July- September) of the current fiscal year that Treasury has partly blamed for the biting cash crisis in government.

Mr Kenyatta was speaking at the Kenyatta International Convention Centre (KICC), Nairobi, during the KRA Taxpayers Award ceremony.

Treasury secretary Henry Rotich said his office would establish a hotline that Kenyans can use to pass on tax-related information to the authorities.

“We have also discussed with KRA the modalities of establishing a mechanism to audit the lifestyles of all KRA officials. Very shortly we will be informing the public on the progress in that area,” the minister said.

The integrity of KRA officials has come into focus in the recent past as a biting cash crisis hit the government causing MPs to demand from Mr Rotich concrete measures aimed at reducing graft among tax officials.

The MPs who met Mr Rotich last Thursday and are due to hold another session this morning, cited rampant corruption at KRA as one major cause of the taxman’s failure to meet his targets.

On Monday, two KRA officials were arrested in Naivasha for allegedly soliciting a Sh50,000 bribe from a hotelier. The two had reportedly demanded the bribe so as not to report the hotel for failing to use an ETR machine to receipt customers.

KRA Commissioner-General John Njiraini said the agency was relying on the ongoing automation of processes to reduce corruption among its staff.

He added that many key decisions such as those touching on valuation for customs had been left to staff members, opening windows for corrupt practices.

“The actions we are taking will not only help enhance revenue collection but also facilitate our dealing with the intractable challenge of integrity and corruption amongst staff,” he said.

“We will also by December this year install a secure intelligence gathering system for use by the public and taxpayers to report corruption and tax evasion.”

Among the changes on the cards is the introduction of large cargo scanners at the Port of Mombasa that are expected to improve customs capacity to inspect suspect cargo, without physically stripping of containers. 

The agency also plans to install passenger baggage scanners at the Jomo Kenyatta International Airport (JKIA) arrivals lounge in the next four months.

KRA is yet to release the revenue collection results for the first quarter of the current financial year but Mr Rotich said the agency had missed the target.

The revenue collections have fallen short of the government’s expenditure needs, causing delays in the payment of teachers’ salaries, disbursement of development and county government funds.

Besides the staff vetting, Mr Rotich said the Treasury was introducing new administrative measures to improve tax collection.

Key among them is deeper surveillance of container freight stations (CFS) that will require KRA to monitor goods moving in and out of such facilities to avoid leakages.

The Treasury will also be installing CCTV cameras at the stations to monitor movements especially at night.

CFS will also be required to only put in place approved security measures as opposed to the current scenario where they are responsible for their own security.

“We will be monitoring CFS’ to seal the loopholes by for example doing due diligence before renewal of their licences. Currently, CFS are not required to renew their licences,” Mr Rotich said.

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