NAIROBI: Kenya has been asked to shelve plans to split the Kenya Revenue Authority (KRA) into two semi-autonomous entities — the Domestic or Inland Tax Agency and the Customs and Border Control Agency.
The International Monetary Fund (IMF) wrote a report to KRA last year opposing the plans.
Officials aware of the plans say the authority may agree with the IMF recommendations that Kenya currently does not have the capacity to run the two entities independently.
In its report, IMF says there is need to strengthen customs’ core functions in the future and in particular on its border protection and trade facilities and modification of the current KRA structure.
“There is need for a programme to strengthen the KRA’s capacity to manage taxpayers’ compliance,” reads part of the December 12, 2013 report.
The report proposes that given unresolved issues that need to be addressed, a phased implementation that would not adversely affect revenue or trade flows would be the most appropriate approach in Kenya.
Yesterday KRA Chairman Marsden Madoka confirmed the report by IMF, saying they were studying it before appropriate decision is made.
“We are waiting for a report from the committee that was set up after the President announced creating two agencies and study the IMF recommendation before we decide. IMF can have their own report but this does not stop us from implementing what we believe as the best,” Madoka said.
President Uhuru Kenyatta last August said the planned reforms will make KRA more responsive, efficient and effective in revenue collection.
He said the move was in line with East African Community agreements and will facilitate trade and enhance security.
The development came as lobbying for a major post at the authority went a notch higher amid reports of a split between the Treasury and KRA on who should be commissioner in charge of the Investigation and Enforcement.
This follows the retirement of Commissioner of Investigation and Enforcement Joseph Nduati in November, 2013. The retirement of Mr Nduati has triggered internal changes in succession battle.
Several names have been mentioned as the possible successors of Nduati as KRA awaits a report from an external human resource firm contracted to conduct initial interviews.
Currently, Senior Deputy Commissioner George Muya is holding the position in acting capacity. Muya worked as Nduati’s deputy for three years.
A new structure that will come into effect next month will see the position of Senior Deputy Commissioner scrapped.
By CYRUS OMBATI and GEOFFREY MOSOKU, The Standard