- Departmental Committee on Finance and National Planning made recommendations after a fact-finding mission at KRA across the country.
- The House team attributed the taxman's under-performance to under-staffing and recommended the hiring of 2,000 more staff to the current 4,500 permanent and 1,800 contracted staff.
A parliamentary committee has proposed radical changes at the Kenya Revenue Authority to enhance revenue collection.
The Departmental Committee on Finance and National Planning says the revenue collector is understaffed and wants “the National Treasury to allocate additional funds under the Supplementary Estimates I for 2020/21 to employ additional 2,000 staff”.
It attributes the taxman's under-performance to under-staffing. KRA has 4,500 permanent and pensionable employees and 1,800 contracted staff.
The Gladys Wanga-led committee says in its report to the House that lack of substantive investments in KRA had greatly affected revenue collection capacity and, as such, there is a need for far-reaching changes.
The committee wants KRA to install drive-through scanners and to consider purchasing mobile scanners for bulk cargo for all One-Stop Border Posts (OSBPs).
“Parliament should provide this budgetary requirement to be factored through the Supplementary Estimates I 2020/21 with priority on Malaba and Busia OSBPs and in the long-term ensure all OSBPs are adequately equipped with drive-through scanners, mobile scanners and smart gates.”
The committee further wants the National Treasury and KRA to work out ways of making all OSBPs to operate 24 hours by the end of 2021.
“There is a need for regional diplomatic engagement between Kenya and her neighbours to ensure necessary infrastructure is put in place to facilitate 24 hour operation,” states the committee.
The report was compiled after members visited KRA offices at Times Towers, Inland Container Depot, Jomo Kenyatta International Airport, the Port of Mombasa as well as Namanga, Busia and Malaba OSBPs.
Their objective was to assess the capacity of KRA to collect revenue for budget implementation as well as honouring other government obligations.
The visits were undertaken between September 23 and October 10.
The National Treasury was asked to transfer Kenya Ports Authority land in Malaba to KRA for purpose of building a truck parking facility.
“Once transfer is done, the National Treasury should source funding to build the parking before the end of 2021,” the report states
The Treasury was further asked to provide a report to Parliament on the status of Special Economic Zones particularly how they compete with the rest of East African countries within 60 days of the adoption of the report.
“The National Treasury in consultation with the Departmental Committee on Finance and National Planning should review tax laws in order to promote ease of doing business in the country.”
To effectively combat illegal trade and tax evasion at the ports of Mombasa and Kisumu, Parliament was asked to allocate funds in KRA's budget for 2021/2022 to buy speedboats.
The committee noted that digitisation of services had resulted in an increase in the revenue collected by KRA.
KRA has established the iTax - an automated platform for domestic taxes operations- the Integrated Customs Management System for management of customs operations, the iCare for customer support operations and iSupport for administrative support services.
The committee also sought to establish whether budgetary allocation of Sh3.3 billion in the Supplementary Budget for 2018/19 financial year and Sh3 billion in the Budget Estimates for the 2019/20 financial year for Revenue Enhancement Initiatives had been used for the intended purposes.
It further wanted to establish how digitisation of services had increased revenue collection.
The House team established that the amount of revenue collected at the Namanga OSBP has been growing in the last five years but Covid-19 had impacted negatively on trade in the recent months.
“Restriction in movement of persons has affected cross border movement of traders,” according to the report.
It noted that revenue collection points installed with scanners collect more compared to those without.
“For instance, the Malaba OSBP which is busier than the Namanga OSBP, managed to collect Sh2 billion in 2019-2020 financial year compared to Namanga which collected Sh4 billion in the same period,” the report said.
The automation had enhanced revenue collection as there is less human intervention and increased information sharing among regional offices.