Response by Kenya Revenue Authority to the Reduction of Revenue as a Result of Implementation of East African Community Common Market

Abstract

The study seeks to determine the response of Kenya revenue Authority (KRA) to reduction of revenue as East African Community Common Market (EACCM) is being implemented. An argument proposed by Bonyo (2009) states that multilateral or regional trade liberalization is likely to lead to revenue losses. Kenya's implementation of trade reforms as EAC partner, and introduction of new electronic and customer service systems have forced KRA to undertake extensive change-management activities. In our research, data was collected using semistructured questionnaires and in-depth interviews. The results were analyzed by use of descriptive statistics such as percentages and frequency distribution.

These results have then been presented using tables for easy understanding. The research findings have revealed that KRA has invested in taxpayer education and compliance enforcement as a priority. The authority has invested in other areas as well including: business automating systems, customs and tax administration procedures, enhanced investigations and enforcement. KRA staff are being trained to correctly and consistently classify businesses and goods in their respective classes and categories for taxation purposes. The study has shown that implementation of database management like tax registers i.e. Electronic Tax Registers (ETR's) have improved the Authority's' revenue collection.

KRA has employed an Integrated Tax Management System to ensure that senior management are well equipped and able to monitor and handle the extensive information from various income generating vents as well as other administrative related actions. The study recommends that training and education of the stakeholders especially the staff as a key component in facilitating the implementation of efficient systems for tax administration. The study concludes by suggesting areas for further research. The limitations of the study were inadequate resources for the study in terms of time and money.