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Leadership riddle at KRA bad recipe for economic growth

By The Standard | Published Wed, September 5th 2018 at 00:00, Updated September 4th 2018 at 21:13 GMT +3

KRA Commissioner General John Njiraini when he appeared before the National Assembly Public Accounts Committee at Parliament on Tuesday 07/08/18. [Boniface Okendo,Standard]

The leadership of Kenya Revenue Authority (KRA), the country’s tax collector, has been dogged by the unending controversy surrounding the current Commissioner General’s tenure.

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Auditor General Edward Ouko claims in a report that John Njiraini ought to have gone on terminal leave a year ago pending his retirement in accordance with a government circular of 2010.

The question of who stays at the helm of KRA should be resolved, once and for all. If it is correct, as the Auditor General claims that Njiraini is in office illegally then Njiraini ought to bow out honourably. Any sticky matters that need to be addressed to facilitate his exit, should be carried out urgently.

In May, President Uhuru Kenyatta sacked five of the nine board members who had resolved (at a board meeting) to send Njiraini on terminal leave pending retirement. The reasons for the purge have remained scanty.

Be that as it may, KRA is too important to the economy to be left in such limbo. Kenya, with a record-breaking budget of Sh3 trillion needs an efficient and effective taxman. What with maturing debt obligations, recurrent expenditure and pending projects like President Kenyatta’s Big Four Agenda. What's more, the economy has been out of kilter; it has not grown apace enough to lift a sizeable population from the poverty pit.

Actually, besides the brewing leadership conundrum, KRA has consistently missed its revenue targets for two years. In the July- December 2017 period, KRA netted about Sh630.37 billion missing its target by nearly Sh70 billion.

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In the 2016/2017 financial year, it raised revenue Sh50 billion against a target of Sh1.415 trillion. This has been blamed on a taxation model that leaves out many from the bracket, leakages and corruption.

Should the proposal by Treasury to have a 16 per cent value-added tax (VAT) levied on petroleum products be rescinded as is most likely, Treasury will be left with a Sh71 billion hole in its budget. This has to be squeezed from somewhere, and only a KRA with a stable leadership can deliver that. A prolonged tussle over its leadership will surely undermine any efforts to plug the gap.

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