BY VICTOR ADAR
It is tough being John Njiraini. On the fifth floor of Times Towers, the Commissioner General of Kenya Revenue Authority (KRA) surprised Kenyans with his ambitious ideas during the launch of the authority’s 7th Corporate Plan running from 2018 to 2021.
On the one hand, he is working towards raising the number of active taxpayers from 3.94 million to 7 million thanks to a segmented approach, which is basically to become more customer-focused. Yet on the other, Mr Njiraini will collect Sh6.1 trillion of core revenues – try to picture Exchequer revenues, Road Maintenance Levy Fund (RMLF) and Railway Development Levy (RDL) – requiring an annual revenue growth of 12.9%.
Even more ambitious is how he plans to further boost revenues by engaging strategies that will hopefully expand tax base while enhancing compliance among the taxpayers. Actually, he is set to raise revenue to GDP ratio from current 18.3% in 2017/18 to 19.2% in 2020/21.
Although he is banking on the fundamental drivers that include the Vision 2030, the Big Four Agenda, Third Medium Term Plan (MTP 2018-2022) and the 2018 Budget Policy Statement, it is extremely important for him to outthink especially now that the issue of failing to achieve the revenue target keeps on coming up. It is a fact that KRA has been grappling with this over time, reviewing its plans every now and then as far as missing targets is concerned. As at September last year, KRA missed its collection target by Sh60 billion thanks to a slower economy – tax revenue hit Sh320.311 billion compared to Sh380.76 billion that was set by Treasury.
As always the case, the achievement of targets depends on various factors. Apart from economic performance (indicators), employment growth, part of it is the behaviour of assumptions that underline the setting of targets. Banking sector, which is a very critical player in tax performance, didn’t do well thanks to the prolonged elections process and rate cap law that has, sort of, made it difficult for tiny players to access loans. It is clear, therefore, that if high growth sectors fail to work, tax collection is impacted.
We believe that the investments we have made during the 6th corporate plan have provided the foundation for us to do a lot much better. It has been a very ambitious and holistic reform of our business processes.
Although there seems to be a challenge in making things happen, the blue print, which is built around three years, is expected to steer the Authority to a success in tax administration and consequently be a pivot in the realization of the Big Four Agenda.
“We are gradually getting out of it but we are not fully out. Even this year, businesses are still complaining of having not picked up, there’s slugging demand thereby affecting bottom of collections,” Njiraini says, adding that KRA is firmly ensuring that compliance is strengthened.
Funds required to implement the 7th plan, though, is Sh103.690 million, and whether this latest plan will align to the need for the taxman to hit its target this time round still remains to be seen.
“We are seeing incredible results,” says Njiraini. “The idea behind the plan is to align the target with the resources so that we make sure that the things we set out to do are funded, and that we have adequate resources that will help us to deliver on those targets… The 7th plan is going to be a different ball game because of the foundation that we’ve laid. It is a tall order but we are on track.”
Mr Njiraini is a man whose efforts have seen the Authority reach higher heights despite a controversial past. It was last year when eyebrows were raised when he failed to take terminal leave as required by law as his second term was to end in March. Back then, experts said he “is in office illegally” but so far the dust has settled.
Probably he has the best strategy, and it is loud and clear that what he does is currently paying off. He is on the driving seat of a public institution that recently achieved a Silver Mark from CIO100, a CIO East Africa symposium and awards that celebrate 100 organisations leveraging information and technology, an indication that things are looking up at KRA as far as business value is concerned. One of the true testament of his innovations is Customer Relationship Management (CRM), a solution that provides a platform where enquiries, service requests, complaints and compliments can be dealt with and tracked in due course while providing an end-to-end issue resolution and escalation framework.
In addition, CRM solution provides a gateway for taxpayers especially during those crucial due dates like the annual filing season where not only those who file returns last minute (mainly in June) but also those trying to get assistance on matters to do with returns filing cause virtual traffic. It is at the back of such innovations that the customer satisfaction index has improved by 6.9 points from 65% to 71.9%. It is said that the utilization of this solution has contributed 49% of this improvement.
“We believe that the investments we have made during the 6th corporate plan… for example, in technology, in reforming the way we work, the business processes reforms… and in many areas, have provided the foundation for us to do a lot much better. It has been a very ambitious and holistic reform of our business processes,” Njiraini says.
To him, engagement with the customers has significantly been shifting from enforcement to a more facilitative approach, a move that has for a long time been associated with the private sector. His style of revenue mobilization is through transformation, data-driven decision-making and tax base expansion. And for a long time, the begging question on his lips has been; what are the candid issues relating to technology utilization? How can business value be delivered by getting a technology to work?
Njiraini points out that implementing systems would not give overnight results. It is not surprising that huge results didn’t come out of investments poured in the previous corporate plans. It is one thing to implement technology and another to be able to effectively utilise that technology and see results, he says.