A court order barring Kenya Revenue Authority from hiring is threatening to paralyse its operations and undermine revenue collection.
KRA now finds itself in the middle of a human resource storm as contracts for over 50 senior managers are expiring, and the taxman is unable to renew their deals or hire replacements following the High Court judgment. A staff shortage of 4,000 also persists at the institution.
The Nation has established that at least four commissioners, 17 deputy commissioners and 26 senior managers will be out of contract in the coming weeks, a situation that could grind the KRA’s operations to a halt.
On March 1, Busia High Court judge William Musyoka barred KRA from hiring or making internal appointments across the board, and gave the taxman 30 days to put in place an ethnic diversity and regional balance policy.
The judge also quashed the recruitment of 2,006 staff hired in 2023, following a petition by Peter Kabinga Orogo, which argued that the process was skewed in favour of two communities – the Kikuyu and Kalenjin – which accounted for 56 per cent of the new recruits.
That decision has now spread panic at the KRA, which has since moved to the Court of Appeal.
The Appellate judges are, however, yet to give a date for a ruling on whether or not to suspend enforcement of Justice Musyoka’s decision pending determination of KRA’s appeal.
Many of the expiring contracts affect senior officials in departments that are critical to revenue collection, and this may now hamper the taxman’s efforts of hitting the National Treasury’s Sh3 trillion revenue collection target for the financial year ending June 2024.
KRA Board Chairperson Anthony Mwaura confirmed that there are several expiring contracts, and added that the agency has a shortfall of at least 4,000 staff following several exits over the years.
The customs department, Mr Mwaura added, is the worst hit and urgently requires more personnel.
“We cannot fill those positions. Some of those positions need substantive commissioners. In the corporate department, for example, both the commissioner and deputy commissioner are in acting capacity. So there is a big problem and things are paralysed. In the intelligence department we don’t have a commissioner so we collapsed this under investigations and enforcement,” Mr Mwaura told the Nation yesterday.
The KRA boss added that the staff shortage and hiring freeze could affect this financial year’s Treasury-set revenue collection targets.
Justice Musyoka quashed the hiring of 1,406 revenue service assistants and 600 graduate trainees, as he held that the KRA could hold another skewed process and therefore blocked any fresh recruitment across all levels until an ethnic diversity and regional balance policy is adopted.
“An order barring the respondents from recruiting and appointing staff at all levels, until an ethnic diversity and regional balance policy is deployed, giving effect to the values and principles stated in the preamble and Article 232(g)(b)(i) of the Constitution which policy should be in place within 30 days of this order,” Justice Musyoka said, moments after quashing the 2023 recruitment exercise.
A senior official, who insisted on remaining anonymous on account of the sensitivity of the matter, said that some of the most critical departments are hard hit by the freeze. He added that even promotions and movement of workers across departments has become nigh impossible on account of Justice Musyoka’s decision.
Mr David Yego, the Commissioner in charge of investigations and enforcement and his legal services and board co-ordination counterpart Paul Matuku, are among the top brass whose contracts are nearing expiry. Mr Yego’s department is tasked with tracing tax evaders and enforcing court judgments that allow the KRA to collect unpaid levies.
The taxman intends to split enforcement from investigations and intelligence, which means hiring another commissioner. That move, too, has been blocked by Justice Musyoka’s judgment.
Mr Matuku’s department defends the taxman in court, advising the Board of Directors and enforcing legal policies that allow the KRA to conduct its business. It also coordinates Board of Directors functions and operations.
Two acting Commissioners – Alex Mwangi (strategy, innovation and risk management) and Nancy Ng’etich (corporate support services department) – also have their contracts expiring soon.
Mr Mwangi’s docket entails conjuring up tactics to help both the collection of taxes and improve the taxman’s corporate stature and image.
Ms Ng’etich leads her team in corporate oversight, offering support systems to critical departments and putting in place good governance structures.
By blocking internal appointments, it means the KRA cannot replace those whose contracts are expiring, or appoint anyone in acting capacity.
“We are at a loss with this judgment. We do not know when the appeal will go through but for sure it is really affecting the overall delivery of the ambitious targets given to us by the Treasury,” a senior KRA official, who sought anonymity on account of sensitivity of the potential crisis, said on phone. While we could not immediately establish their names or designations, an insider revealed that there are 17 deputy commissioners whose contracts are also expiring in the coming weeks.
“Advertisements were to be published soon for the 17 deputy commissioners, but that can’t happen now because everything has stalled,” the senior official added.
The 30-day window given to the KRA to put in place an ethnic diversity and regional balance policy will expire next Monday, and sources indicate that the document has not been prepared.
This means the KRA will enter a full-blown human resource crisis that could directly jeopardise its revenue collection mandate, and potentially affect the Kenya Kwanza budget for the 2024/25 financial year.
President William Ruto has on several occasions stressed the need for a revenue-centred budget, to help cut down on borrowing that has left Kenya’s economy struggling under the weight of debts with huge interest terms.
Justice Musyoka’s judgment came six months after the Senate Committee on National Cohesion, Equal Opportunities and Regional Integration termed the recruitment unacceptable.
The committee summoned KRA officials over the recruitment. The acting Commissioner-General Rispah Simiyu revealed that 403 individuals hired in the recruitment were from the Kalenjin community.
Another 385 individuals were from the Kikuyu community. The two communities accounted for a combined 56 per cent of the hired revenue service assistants.
Marsabit Senator Mohammed Chute reprimanded the present KRA officials, saying the recruitment gave credence to Deputy President Rigathi Gachagua’s quip that communities that voted the most for the Kenya Kwanza administration will get top priority as top shareholders in government.
The recruits were already undergoing training when Justice Musyoka started hearing the case filed by Mr Orogo.
They have since been asked to stay home, as the KRA awaits the Court of Appeal’s determination.
