Githii Mburu: Tale of ruthless taxman forced out in radical management surgeryMonday February 27 2023
Eight months is a long time when you are serving in a high-profile public office.
In mid-June 2022, James Githii Mburu sat in his 30th-floor office at the Times Tower in Nairobi, calmly outlining the tough measures he had rolled out as the commissioner-general of the Kenya Revenue Authority (KRA) in a protracted battle against tax cheats.
He would, three weeks later, present revenue collection numbers that would reflect the success of the KRA’s relentless chase after taxes.
The agency announced that it had exceeded the collection target for the 2021/2022 fiscal year by Sh149 billion, raising Sh2.03 trillion in the process.
Read: Why Mburu cut short five-year KRA term after 8 months
Fast forward to last week, his tenure of just under four years as head of the revenue body came to an end, having found his position become increasingly untenable amid executive criticism of his aggressive chase of tax arrears and a raft of changes on the KRA board and C-suite.
The tale of how Mr Mburu went from being one of the stellar public sector performers to a man under siege at the Times Tower is a study of the inevitable link between the political and economic affairs of a country.
In order to beat the revenue collection target for the first time in 14 years, the KRA had waged an aggressive campaign against some of the wealthiest business people in Kenya, accusing them of holding billions in unpaid dues over the years.
The clampdown followed an order by former President Uhuru Kenyatta to recover unpaid taxes from high-net-worth professionals and traders in an effort to raise national revenues.
In turn, the government rewarded Mr Mburu’s efforts by handing him a fresh five-year term in June after serving his initial three-year contract that started on July 1, 2019.
Prior to the appointment as commissioner-general, he had served in the agency’s audit and intelligence units— including commissioner of intelligence and strategic operations— leaving him well placed to know where revenue leakages were occurring, which taxpayers were culpable and the people inside the KRA who were abetting the evasion.
The highest profile tussle pitted him against the Naivasha-based Keroche Breweries, which the agency shut down three times over tax claims totalling up to Sh22.79 billion.
Other high-octane cases involved a Sh17 billion tax claim on tycoon Humphrey Kariuki of Africa Spirits Limited and a Sh2.2 billion tax evasion suit against businesswoman Mary Wambui Mungai.
In total, the taxman had done intelligence profiles on 4,028 cases of unpaid taxes with a revenue potential of Sh540 billion.
Mr Mburu was adamant that the businesspeople would pay up the tax demands, saying that “to allow a tax-evading business to continue operating despite it dishonouring all payment plans is to promote a culture of impunity, promote unfairness and allow a few to use public funds to enrich themselves.”
Meanwhile, there were grumblings from the political camp of President William Ruto—then the Deputy President—that the KRA was among a number of public institutions that were being used to wage a war on his allies for backing his presidential bid.
Upon being elected into office, Dr Ruto made clear his displeasure with the aggressive way that KRA had gone after Kenyans facing tax demands, directing the taxman to stop harassing Kenyans while collecting taxes and instead embrace consultation and engagement to recover the monies owed.
The President’s argument was that the KRA was better off agreeing to a repayment plan with firms owing tax than ordering their closure.
He also took issue with tax leakages through the sale of counterfeit excise stamps, saying that the KRA’s annual sales of 2.9 billion stamps were well below its ideal volumes of between 10-12 billion stamps.
Here, the President laid the blame directly on the doorstep of the KRA boss, telling Mr Mburu that the government had provided him with all the information he needed to stop the leakages and that he had no choice but to tell his people to stop the sale of illegal stamps.
Dr Ruto added that he had told Mr Mburu to sort out the matter, and that “if he doesn’t sort out the mess, I’ll sort it out myself.”
At the same time, some of the high-profile businesspeople previously involved in fights against the KRA found a footing in the new government.
Read: Friendlier taxman still elusive
In December, Mr Kariuki was appointed as a member of the National Investment Council, while Ms Wambui was appointed chairperson of the Communications Authority of Kenya (CA).
There have also been wide-reaching changes at the KRA itself, starting with the November replacement of the former head of civil service Francis Muthaura with businessman Anthony Nganga Mwaura as chairman. Mr Mwaura has taken a more visible and hands-on role at the agency compared to his predecessor.
In January, Treasury Cabinet Secretary Njuguna Ndung’u made five changes to the KRA board, bringing in Darshan Shah, Fancy Too, Wilkister Simiyu, Michael Kamau Kamiru and Samir Ibrahim, who replaced Susan Mudhune, Mukesh Shah, Richard Opembe, Leonard Ithau and Charles Makori Omanga.
Last week, attention shifted to the ranks of commissioners, where Lilian Nyawanda (Customs and Border Control), Terra Saidimu (Intelligence & Strategic Operations) and David Kinuu (Corporate Support Services) were replaced by David Mwangi, David Yego and Nancy Ngetich respectively in an acting capacity.
Commissioner of Domestic Taxes Rispah Simiyu replaced Mr Mburu in an acting capacity, while her post was taken up by Pamela Ahago, also in an acting capacity.
All these personnel changes around him, and the shift in strategic direction at the agency left Mr Mburu with no other option but to jump ship.