By NJIRAINI MUCHIRA
Government is plotting forced reforms at National Social Security Fund (NSSF) and the National Hospital Insurance Fund (NHIF).
The twin Funds — critical to provision of social security and social healthcare — have had a history of scams.
Over the past decade, however, the two State Funds have aggressively and successfully resisted reforms — exposing their multi-billion tills to wanton plunder.
In the wake of open graft and mismanagement at the two Funds, the National Economic and Social Council (NESC) is pushing to transfer the mandate of collecting statutory deductions on behalf of the two institutions to Kenya Revenue Authority ( KRA).
NESC is the body spearheading the implementation of the Vision 2030 economic blueprint.
The Business Regulatory Reforms Unit at the Treasury is also supporting the proposal, which has remained under wraps due to the fires its bound to ignite.
sole collector
At the core of this proposal is an argument that the transfer will not only be crucial in tackling deep rot at the NSSF and NHIF, but will also improve efficiencies.
It is now emerging that NESC intends to petition Cabinet to approve the drafting of a bill amending the KRA Act to make the authority the sole collector of all forms of revenues.
The fact that President Kibaki chairs the NESC with Prime Minister Raila Odinga as the alternate chair tells of high-level political support for this proposal.
Currently, the revenues listed on the KRA Act do not include NSSF and NHIF contributions. However, NESC is now pushing for the expansion of the list to include the two statutory deductions.
“It is logical for KRA to collect the contributions because the deductions are from the same payroll,” KRA Commissioner General John Njiraini told Weekly Business in an interview.
core business
“Transferring the mandates of collection to KRA will ease the burden on NSSF and NHIF in as far as auditing and accounting is concerned — in the process enabling them concentrate on administration and investments,” he said.
Kenya Private Sector Alliance (Kepsa) chairman Patrick Obath supported the move to have KRA take over the mandate of collecting from both the NSSF and NHIF.
