KRA succession race opens as Njiraini exits

The tenure of Kenya Revenue Authority (KRA) Commissioner-General John Njiraini is set to come to an end in June, opening the succession race at one of Kenya’s most coveted public offices.

KRA board chairman Francis Muthaura in a Friday interview said Mr Njiraini has four more months at the helm, in which time a replacement for the top taxman will be sought. Mr Njiraini’s departure will end a seven-year stint at the Times Tower corner office. He was appointed to the helm of KRA in 2012 by President Uhuru Kenyatta, the then Minister of Finance.

His two, three-year terms came to end on March 3 last year, before being extended for an undisclosed period.

“(His) contract is up to end of June…,” said Mr Muthaura on phone.

The KRA chair said the board has ample time to pick Mr Njiraini’s replacement, allying fears of a possible leadership vacuum.

The chief taxman’s exit was the subject of intense speculation in months leading up end of his tenure last year as a fierce succession battle raged at the tax agency. The confirmation of his exit is now expected to mark the official start of the succession race.

The new commissioner general will take over at a time when the agency is under pressure from the executive to collect additional revenue.

KRA, which has perennially missed its targets, is facing a mountainous task of raising enough revenue to finance the government’s Sh2.9 trillion budget.

The taxman is expected to raise close to Sh2 trillion of Treasury Secretary Henry Rotich’ spending plans which seek to pump Sh1.66 trillion into recurrent expenditure between July 2019 and June 2020, while development projects will get Sh670.8 billion.

Mr Njirani’s tenure at KRA has been a mixed bag of wins and misses. The former Institute of Certified Public Accountants (Icpak) boss placed his bet on technology and revamped legal systems to enhance tax compliance. While tax collection has grown consistently over the years, Mr Njiraini has remained under pressure for missing revenue targets set by the Treasury. More changes are expected at the agency with Mr Njiraini’s exit.

KRA has already begun to reorganise its team of senior managers under the watch of Mr Muthaura, the former head of Public Service. President Uhuru Kenyatta, in a special May 23 2018 gazette notice, appointed Mr Muthaura, then 71, to serve as KRA board chairman until October 20, 2019. The president revoked the appointment of then chair Edward Sambili. Under Mr Muthaura, the KRA board has already made a series of high-profile recruitments and is expected to name more. The new team is expected to help the taxman grow collections to Sh1.997 trillion in the year starting July and Sh2.298 trillion in the 2020-21 fiscal year under its corporate plan launched on January 16.

The plan is hinged on growing the taxpayer base to seven million by June 2021 from 3.94 million in June 2018 through use of intelligent ICT platforms such as iTax, the online tax filing system and the Integrated Customs Management System for real-time monitoring of goods at major border points.

The KRA board recently named Mr Kevin Safari as the new commissioner for Customs and Border Control after a recruitment that started last October. The position fell vacant following the exit of Julius Musyoki.

The KRA board is also expected to name a substantive commissioner for domestic taxes, a position that deputy commissioner Ruth Wachira has been holding in an acting capacity since July 6, last year.

This followed the exit of Benson Korongo whose contract was not renewed.

The taxman targets to expand the tax base by 3.06 million taxpayers by June 2021 from 3.94 million in June 2018 by spying on homes and businesses using technology to flash out cheats in a bid to raise compliance to 65 per cent by June 2021 from 59 per cent in June 2018.

This includes 418,000 new individual taxpayers, 10,500 corporate bodies, 1.56 million micro enterprises with Single business permits, 66,000 landlords and 25,000 professionals.

By applying this strategy, KRA anticipates it will net an additional 500,000 taxpayers from whom it expects to collect approximately Sh60 billion in the current year, Mr Njiraini had earlier said.

The outgoing taxman however said earlier this year the collection target for the current year was not likely to be achieved.

“The prolonged elections significantly affected businesses. We are largely getting out of it, but we are not out of it,” the chief taxman said on January 16.

“We still have businesses complaining and expressing concerns regarding the (the slow) pickup of economic activities and sluggish demand, and, therefore, affecting bottom-line in terms of profitability.”

Kenya’s cumulative revenue collection shortfall hit Sh185 billion in the three years to June 2018.

Mr Rotich had set a target of nearly Sh4.19 trillion for the KRA in the period, but that fell short by Sh184.8 billion largely due to shocks in the economy and inefficiencies in the tax administration system.

The new team is expected to help the KRA grow collections to Sh1.997 trillion in the year starting July and Sh2.298 trillion in 2020-21 fiscal year under its corporate plan launched on January 16.