KRA rebranding to cost taxpayers Sh2.7 billion, lawmakers told

Proposed reforms at the Kenya Revenue Authority (KRA) will cost the taxpayer Sh2.7 billion, according to estimates presented to the National Assembly.

KRA’s acting Commissioner for Corporate Support Services, Ms Nancy Ng'etich, while presenting the agency's estimates for the 2023/24 financial year before the Finance and National Planning Committee, said the rebranding to Kenya Revenue Service (KRS) is aimed at increasing revenue mobilisation and "being a service oriented organisation".

Ms Ng'etich told the committee chaired by Molo MP Kuria Kimani that the rebranding project will be implemented in two phases over the next six years, with each phase expected to cost Sh1.34 billion.

The KRA rebranding project started in the 2021/22 financial year and Sh250 million has been proposed for allocation in the next financial year, which starts on July 1.

But Baringo North MP Joseph Makilap questioned the cost.

"The renaming of KRA to KRS is going to consume the figures as stated in the document you have presented to us. Why should it cost so much and is it necessary?" asked Mr Makilap.

But Ms Ng'etich explained that the rebranding was not only about changing the name but also transforming its systems and operations, and changing its reputation - from a seemingly commandeering organisation to a friendly one.

“Moving KRA to KRS is meant to make it more customer centric,” Ms Ng’etich told the committee as she pushed for enhanced funding.

The process of renaming KRA was initiated in the 12th Parliament through the Kenya Revenue Authority (Amendment) Bill 2022.

"The name change is intended to rebrand the authority in order to transform its public image and thereby enhance tax compliance through improved public relations and a clear focus on the needs and rights of taxpayers," the Bill said in part.

However, the Bill was withdrawn by then Majority Leader Amos Kimunya on June 9, 2022, at the committee stage after he disagreed with amendments proposed by his then predecessor, Aden Duale, who is now the Defence minister.

Mr Kimunya, then the Kipipiri MP, cited the National Assembly's Standing Order 141 (1) when withdrawing the Bill after confusion arose among MPs as to whether it was intended to limit the tenure of the commissioner-general, commissioners and chairperson of the board and its members.

There was also a misunderstanding as to whether the tenures of the commissioner-general, board chairperson and the members should start as if they were being appointed for the first time.

Mr Duale had proposed that the commissioner-general be recruited by the board through a competitive process and appointed by the President with the approval of the National Assembly.

He also wanted the commissioner-general to hold office for a period of four years and be eligible for reappointment for a further period of four years, subject to satisfactory performance.

“The Commissioner-General shall be appointed on such terms and conditions of service as the board may determine in the instrument of appointment, upon advice of the Salaries and Remuneration Commission (SRC),” Mr Duale said at the time.

The KRA Act provides that the commissioner-general be appointed by the National Treasury cabinet secretary on the recommendation of the board.

But Mr Kimunya was not happy with Mr Duale's proposals at the time and invoked standing order number 140 (1) of the National Assembly Standing Orders to withdraw the Bill.

The Standing Order states that “either before the commencement of business or on the Order of the Day for any stage of the Bill being read, the member in charge of a Bill may, without notice, claim to withdraw a Bill.”

Part two of this Standing Order provides that if the Speaker is of the opinion that the claim is not an abuse of the proceedings of the House, the Speaker shall direct that the Bill shall be withdrawn.

Mr Kinyua said, “Because this is such a fundamental alteration of the original Bill, I want to save this House the time to debate the Bill by withdrawing it."

The withdrawal of the Bill meant that it automatically lapsed as it happened on the last sitting of the 12th Parliament, before an adjournment to pave the way for the August 9, 2022 General Election.

A Bill that has been withdrawn can only be reintroduced through re-publication just like a new Bill. Therefore, in order for the rebranding to take place, the government will have to publish another Bill with a clear indication of whether it will change the terms of the current commissioners and the board.

Section 7 of the KRA Act provides that a member of the board, including the chairman, shall serve for a period not exceeding three years and shall be eligible for reappointment for one more term of three years.

Mr Githi Mburu, the immediate former KRA Commissioner-General who resigned in February, was initially appointed for a three-year term effective July 1, 2019. His term was renewed for five years in June 2022, through a Gazette notice.

By the time he was resigning, Mr Mburu had served eight months of his new five-year term.

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