Why are things suddenly going south at KRA?

If you want to make changes at the revenue agency, you must observe two things. 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 reason to worry about their future in the organization. To cushion themselves against uncertainties, they will share the revenue with the exchequer. That is not a remote possibility.

Second, ensure the sustainability of key technical competencies. Take care not to remove technical officers in large numbers at a go. It takes about 7 years to create a critical pool of dependable technical skills in tax administration. The first 2 years are spent at the training school and desk training, and the next 5 years on navigating the delicate ropes of tax administration.

In KRA, a large number of senior staff do not have technical skills in tax administration. They are mere joyriders who can be replaced without much effect on revenue collection.

In fact, best practice favours outsourcing of most of the non-core responsibilities in tax administration. The technical staff comprise just about 20 per cent of the entire human resource complement. So, it is instructive that any layoffs be done in a manner that neither depletes the critical mass of technical skills nor sends the wrong signals to the remaining technical staff.

I think 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.

Most outsiders, including the newly appointed board members, think that anyone who goes by the name "Revenue Officer" is trained in revenue administration. The reality, however, is that a lot of officers in the organization were deployed before they received any meaningful training on revenue administration. These officers depend on a daily basis on their trained colleagues for guidance on technical and policy decisions. The professional burden on the relatively few technical officers at KRA is therefore very heavy.

Kenya Revenue Authority (KRA) headquarters at the Times Tower Building, Nairobi. [Jenipher Wachie, Standard]

In the past several weeks, however, Kenyans have seen circulars signed by the current Chairman of the KRA Board of Directors purporting to make a raft of technical and policy decisions on behalf of KRA. Such decisions are a clear manifestation of attempts to usurp the powers of the CG and the Cabinet Secretary in charge of the National Treasury without an overt legal anchor.

Such unilateral decisions have caused panic among taxpayers and revenue officers alike. Everyone appears to be waiting, in vain, for guidance from the office of the CG.

Meanwhile, the revenue officers cannot make technical decisions on matters that are the subjects of the Chairman's circular for fear of reprisals. The implications are that a lot of revenue is locked up awaiting the CG's nod while taxpayers are preparing lawsuits against KRA for illegal or delayed decisions that are costing them huge amounts of money in lost opportunities.

The CG, on the other hand, cannot make certain critical decisions without the express authority of the Chairman. Is it any wonder that KRA cannot meet its revenue targets?

Things are not looking very good at the taxman's office. Some courageous Kenyan needs to tell the President to crack the whip and cause the Chairman to shape up. The chairman is largely responsible for the procrastination and lethargy at KRA, a situation that is undermining revenue collection.

So, we have a situation in Kenya where the government is in dire need of increasing amounts of exchequer revenues, but the president's trusted man at the helm of KRA is literally clogging the revenue administration processes! Consequently, the government cannot comfortably meet its domestic and offshore financial obligations.

It is a problem of entrusting gigantic responsibilities to greenhorns. Kenya has all the domestic revenues it requires to run its internal affairs. All that needs to be done is streamline revenue administration processes, embrace taxpayers, and motivate tax collectors. If we get all three right, we will be home and dry as far as tax administration is concerned.

Tax administration is not rocket science. But the government must get it right at the first instance. Mwai Kibaki was precise in the first instance. Uhuru Kenyatta got it right after a rather prolonged learning curve. William Ruto has gotten it wrong in the first instance. It is not too late, though. Things can still be put right at KRA. The ball is in the president's court.

-Prof Ongore teaches business at the Technical University of Kenya (TUK).