The Cabinet Secretary Nominee for National Treasury John Mbadi has undertaken to focus his energies on reforming the Kenya Revenue Authority (KRA) to work at full capacity to raise the required revenue for the government to run its programmes.
According to Mbadi who was appearing before the National Assembly Committee on Appointments for vetting Saturday morning, the solution to the revenue deficit does not lie in increasing the taxes but in collecting them.
“A lot has been said about revenue mobilization and the focus has been that we should be changing tax rates, increasing taxes, and coming up with new taxes. I don’t think that is the solution. The solution to revenue mobilization should be targeting the tax collector KRA,” Mbadi told the committee chaired by House Speaker Moses Wetangula
If approved by parliament to be the next CS Treasury, the lawmaker pledged to invest heavily in the modernization of the tax man’s systems, to give it the ability to meet and even surpass its revenue collection targets. He says this includes scrutinizing the capacity of staff working at the agency to execute their mandate.
“Kenya Revenue Authority is like a cow which we milk without feeding. We have a provision that 2% of our revenue should go toward building the capacity of KRA but we don’t do it. Look at the system that KRA is using at the moment, it needs reengineering,” he said
“One of my first tasks will be to make sure that I have a sitting with KRA to look at how we can reform that institution, because there was a time, not long ago, when we collected 18% of our GDP as taxes, today it is 14%. If we could just increase our current 14% to 18% we will be adding around Ksh. 600 Billion to our revenue base,” explained Mbadi
Mbadi disclosed that the country is losing a lot of revenue owing to a lack of efficient and effective systems to deal with those keen on dodging their responsibility to pay taxes. He believes a well-organized system manned by properly trained staff will give Kenya the revenue it requires at all times.
“If you listen to those who are involved in collecting taxes, especially customs duties, we are losing a lot through smuggling and counterfeit products because we don’t have a system that is foolproof, that can help up manage these tax leakages,” he said
“You must have properly trained tax experts. The way we are recruiting staff and deploying them at KRA needs to be looked into. You cannot have people who are not properly trained to collect taxes from people who hire properly trained accountants to calculate their taxes,” added Mbadi
Mbadi is one of the five leaders from the opposition who were nominated by President William Ruto into his new cabinet, after widespread anti-government protests sparked by Finance Bill 2024, which was blamed for introducing taxes considered oppressive to Kenyans.
