Kenya While the Kenya Revenue Authority _KRA_ receives negligible

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Kenya While the Kenya Revenue Authority _KRA_ receives negligible Powered By Docstoc

While the Kenya Revenue Authority (KRA) receives negligible financial support from
donors, it relies heavily on IMF Fiscal Affair Department (FAD) and East AFRITAC
(AFE) technical support. In 2004, a FAD revenue administration mission developed a
comprehensive reform and modernization strategy for tax and customs administration.
KRA used the FAD recommendations to develop its own revenue administration reform
and modernization program. To support the reform strategy, FAD and AFE have
continuously provided technical assistance (TA) through follow-up visits and peripatetic
expert assignments. On tax administration, a six months peripatetic assignment was
successfully completed in February 2007. The key achievements include: (i)
reorganization of tax administration from a type-of-tax to a function-based organizational
structure with a strong head office; (ii) implementation of taxpayer segmentation and
strengthening the large taxpayers office; (iii) strengthening administration of medium
taxpayers operations and implementation of a presumptive tax regime for small
businesses effective January 2008; and (iv) review of tax administration processes and
the planned acquisition of an integrated tax administration system (ITAS).

With regard to customs administration, a July 2007 diagnostic mission concluded a
review and updated the 2004 strategy. The review took into account recent developments
including the launch of the East Africa Community customs union and the deployment of
a large scale information technology system Simba 2005). A customs expert was
subsequently assigned for visits that would span a total of six months. The expert has so
far concluded three of the scheduled six assignments. He has reported a revitalized
commitment to reforms, improved focus in the management of the reform process, and
encouraging progress in implementing the recommendations of the July 2007 customs
administration mission.

Overall, positive engagement has been maintained with KRA and during FY 2008/09
AFE TA will include program monitoring and providing strategic advice for management
of the medium taxpayers office. The customs peripatetic expert will also continue
providing strategic advice to the Customs Services Department.

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