Kenya Tax Administration Simplification Project (KTASP)

Country: Kenya

Locations within Country: Nairobi

Services: Business Process Inventory, Business Process Mapping, Business Process Reengineering, Harmonization

Context of the Assignment: 

The objective of this assignment was to work with the Kenya Revenue Authority (KRA) to simplify and streamline Kenya’s tax administration, in harmony with previous tax simplifications conducted at the Tanzania Revenue Authority (TRA), Uganda Revenue Authority (URA), and Rwanda Revenue Authority (RRA). The background to this reform initiative is the EAC Tax Procedures Harmonisation Project, dated September 2012, whereby the World Bank Group in collaboration with the East African Revenue Authorities Technical Committee (EARATC) reviewed and studied existing national tax administration regimes in the then five EAC partner states, both in law and practice, with a view to selecting those that are logical and achievable for potential alignment across the region. Emphasis was placed on removing burdensome procedures for taxpayers and harmonizing those procedures that promote compliance across the EAC region and are likely to foster increased domestic and foreign investment and growth.

KRA is a statutory body established by an Act of Parliament in 1995, the Kenya Revenue Authority Act, 1995 (Cap. 469). It is the predominant government revenue collection agency accounting for over 96% of government ordinary revenues. In 2010/11, KRA collected Kshs. 635,971 million against a target of Kshs. 658,640 million registering performance of 96.6%. Its mission is to promote compliance with Kenya’s tax, trade and border legislation by promoting standards set out in the Taxpayers Charter and responsible enforcement by highly motivated and professional staff, thereby maximizing revenue collection at least possible cost for the socio-economic well-being of all Kenyans.

Description of the Assignment: 

Apex Consulting was engaged by the IFC to work directly with the Kenya Revenue Authority on streamlining the key tax processes. The targeted processes spanned registration, filing, payment, audit, and appeals for VAT, income tax, and payroll tax. Apex mapped the targeted processes and provided specific reform recommendations to the concerned authorities on the basis of global best practices and previous experiences in the region. The results of this assignment were the reduction of the tax cost of compliance and improvement of the overall investment climate in Kenya.

Another important objective of this assignment was to simplify and streamline Kenya’s tax administration in harmony with previous tax simplifications conducted by Apex in the East African Community (EAC) at the Uganda Revenue Authority (URA), the Tanzania Revenue Authority (TRA) and Rwanda Revenue Authority (RRA).