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Winning public trust vital for KRA
Kenyans queue to file their Kenya Revenue Authority (KRA) returns at the outdoor-set temporary office at Masaai Market ground in Nakuru Town on June 11, 2024.
In the two weeks since being sworn in as Kenya Revenue Authority chairman, I have done what I suppose every new board head does. I have met fellow directors and senior management for an intensive deep dive.
Then went on to meet middle managers and staff to get a sense of the organisation.
In between, I have spoken with key stakeholders - the National Treasury and Central Bank of Kenya. I have visited a regional office, a satellite office, and a service point at a Huduma Centre.
I have listened to advice from various friends and well-wishers. I have heard the views of our clients both large and small.
Overwhelmingly, these conversations have been candid, warm and positive. Like the key stakeholders, both staff and clients are keen that we should succeed.
But not surprising, a good thing can be made better. We are listening keenly, and as board we will expect an agile senior management, delivering swiftly.
There is no denying that KRA has been through change of guard at board and senior management levels in recent times.
I am the third chairman of board in three years, with the urgent task to settle strategy, and the structure as well as management team to deliver that strategy.
The broad strokes of the strategy are clear – digital transformation, and an absolute, unwavering focus on our clients. In the short period of time I have been chairman, I have been impressed by the confidence of our middle managers and staff.
We are 9,600 strong, and as I found out when I run a county, frontline revenue staff can sometimes face hostility from angry customers.
The anger is often from clients who feel that their taxes are wasted or that they cannot see the benefits of paying taxes.
Yet, everything that governments – past, current and future – do, is paid for through taxes. A few nations have additional revenue streams from selling minerals and other natural resources.
All countries have investment income from companies they own or investments they made, but it is only in a handful where this stream is significant.
In the last two decades, Kenyan governments have borrowed to accelerate infrastructure development. The thing to remember though, is that public debt is differed taxation.
Of course, governments often settle debt that are due, by issuing yet more. We have nice English for it – liability management. Ultimately though, when governments settle debt, it comes from tax revenue.
Not all tax agencies face hostility though, I told the staff that I met. The Swedish Tax Agency (STA) for example, was the 8th most trusted institution or company in 2023, with 65 percent of respondents expressing high confidence in it, according to Statistica.
Naysayers will say that the Swedish electoral system, the police, healthcare and the armed forces ranked higher in a top 10 list dominated by public institutions.
Still, it says something that the taxman ranked higher than the Judicature and the Red Cross! We have an ongoing learning partnership with STA, middle managers told me, with some of our team having been to Sweden only recently.
“Thirty years ago, we were where you are”, the STA told our team. Playing the most crucial role, but unloved. But years of consistent customer focus has earned them trust.
Part of customer focus is eliminating sources of disputes by using technology. But where such disputes occur, using both the Alternative Dispute Resolution programme, and the Tax Appeals Tribunal to resolve them quickly and cost-effectively.
But clients can find tax matters daunting, so the law provides for tax agents, to ensure that our clients have the services of professionals with specialist tax knowledge as they approach the tribunal or engage in the ADR process.
And because client acquisition is continuous, so is our provision of tax education. Client acquisition often needs staff to go door to door.
Reliance on technology will make this task easier. And education is not just about rights and obligations, but the why or reasons to pay tax.
We are running a tax amnesty till June 30th, this year. Ordinarily, late tax payment attract penalties and interest.
But if you pay any arrears for periods to December 31, 2023 in full during the amnesty period, then the waiver of the penalties and interest is automatic.
Where a client is unable to pay the arrears in full in a bullet payment, they should approach us with a payment plan, which once accepted, the Commissioner waives the penalties and interest.
The writer is the chairman of Kenya Revenue Authority (KRA). You can reach him on email at [email protected]
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