Board chair vows to fix tax body by December

Kenya Revenue Authority (KRA) board chairman Anthony Mwaura has said that his team has embarked on cleaning up the tax collector.

Mwaura vowed to professionalise the revenue authority before the end of the year.

He said KRA met last month's target and they are looking forward to a surplus before the end of the financial year.

Mwaura said he was keen to have employees who are determined to help President William Ruto's government collect taxes and not looking at where to steal.

"We have rogue staff among the team at KRA, their work has been to enrich themselves rather than help the authority collect taxes. We have begun showing them the door, we are keen on a clean team that has focus and the drive to push our targets," said Mwaura.

He dispelled claims that KRA had failed to collect enough taxes hence the delay in paying salaries to civil servants in national and county governments.

"Last month we achieved 98 per cent target and collected Sh172 billion against a target of Sh173, and that was because of issues of fuel. We will achieve this month's target and surpass the Sh250 billion target by June. Our annual target is Sh2.274 trillion and we are confident of achieving it," said Mwaura.

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Deputy President Rigathi Gachagua revealed that the debt inherited from the previous regime had matured, and called for urgent intervention.

"I must admit that we have had delays in remittances to the counties and salaries to our Staff. However, one of the debts we inherited, had matured, and we had to pay," he said.

He said the government had no choice but to pay up, but was optimistic the salaries would be disbursed this coming week.

Sources at the taxman told The Standard that there was disquiet over the management and the manner in which it was operating.

They noted that the purge at the Kenya Revenue Authority had demoralised employees and destabilised domestic revenue mobilization.

"It is delicate and tedious to put together the necessary nuts and bolts to ensure that a Tax Administration operates effectively and efficiently, but it takes only one bad decision to destabilise it. The current problem at KRA appears to have resulted from one bad decision that sent wrong signals to the entire tax administration system," said an insider.

He noted that if the board wanted to make changes at the revenue agency, they must first identify what you want to change for strategic reasons, move in and fix it quickly, and let the organization absorb the shock and settle down.

"Don't keep revenue officers in suspense for an inordinately long period, as doing so gives them a reason to worry about their future in the organisation. To cushion themselves against uncertainties, they will share the revenue with the Exchequer. That is not a remote possibility," the source said.

In his opinion, the current board-led restructuring has been more whimsical than structured.

"In their zeal to rid KRA of undesired individuals, the board has not paid attention to the possible ramifications of their decisions. The suspense at KRA is simply unbearable for most of the revenue officers. They are waiting to see what finally becomes of the restructuring, which has all the characteristics of an ill-advised, haphazard process. The effects are clear to everyone who cares to see them," he said.

In his response, Mwaura said he will not be deterred from 'draining the swamp of corruption in the agency to ensure that they beat the president's target of raising Sh5 trillion in the next five years.

"The previous tax evaders are fighting back but we will not fear anybody but only God," said Mwaura.

Mwaura last month suspended all the tax reliefs in a move that will see several firms that previously enjoyed tax breaks start paying taxes, and those awaiting refunds facing an uncertain future.

Mwaura said the radical move is aimed at enhancing the current processes related to the payment of tax refunds, exemptions, waivers and abandonments.

The announcement left firms awaiting processing of refunds running into billions of shillings from the KRA in limbo.

But KRA said the move to suspend tax reliefs, which is backed by National Treasury allows the taxman to "audit and enhance the tax relief processes and procedures."

"In a bid to enhance the current processes related to the payment of tax refunds, exemptions, waivers and abandonments, the Kenya Revenue Authority in concurrence with the National Treasury and Economic Planning has suspended all tax relief payments with effect from February 28, 2023, until further notice," he said in a statement.

"In the past five years, KRA has granted tax reliefs and incentives totalling Sh610 billion, with an average of Sh122 billion per annum," added Mwaura.

In January, President Ruto said that no Kenyan will be exempted from paying their fair share of taxes, amid a standoff with the opposition.

Speaking in Mombasa, the Head of State stated that Kenya is not an animal farm where some animals are more equal than others.

Without naming names, President Ruto claimed that the demonstrations were being sponsored by tax evaders.

"Even if they sponsor demonstrations so that they do not pay tax, I want to promise them that they will pay tax, there are no more exemptions," Ruto said.

"This country is not the animal farm where some are more equal than others, we are going to have a society where every citizen carries their fair share of our burden to raise our taxes."