The recent move by the Kenyan Parliament to reinstate the Kenya Revenue Authority (KRA) board’s powers in the hiring of deputy commissioners has marked a significant shift in the agency’s governance structure. This decision came as part of the KRA (Amendment) Bill, (No. 2), 2024, which reversed provisions from an earlier state-backed bill that sought to grant the Commissioner General exclusive powers to appoint deputies without board interference. The reinstatement of these powers is seen as an effort to enhance transparency, accountability, and oversight in the selection process for senior management within KRA.
Background
The controversy over the KRA’s governance began when the Finance Bill, 2023, attempted to strip the Commissioner General of powers to appoint senior officers and department heads. This move sparked concerns among lawmakers, who argued that it undermined the board’s authority as stipulated in the KRA Act. The bill sought to centralize power within the Commissioner General’s office, arguing that it would allow for more efficient decision-making and a streamlined administrative setup. However, many viewed this as an overreach that would limit the board’s ability to oversee appointments and ensure a fair process.
Reinstating Board Powers
The Finance Committee of the National Assembly, recognizing these concerns, rejected the state’s proposal and moved to reinstate the board’s role in the appointment of deputy commissioners. According to the KRA (Amendment) Bill, 2024, while the Commissioner General retains the power to appoint deputies, the board will have the final say in these appointments. This compromise is designed to balance the need for agility and quick decision-making in management with the need for accountability and oversight. The committee chaired by Molo MP Kimani Kuria argued that giving the board approval powers would ensure a transparent and accountable process in the selection of senior management.
Implications for KRA Governance
The amendment reflects a broader debate about the role of boards in public institutions, especially those with significant operational and financial responsibilities like the KRA. The board’s role is crucial in maintaining checks and balances, ensuring that the agency operates within the law and with integrity. By re-asserting its authority in the appointment process, the KRA board aims to prevent potential conflicts of interest, especially given the strategic importance of the positions involved—Customs and Border Control, Legal Services and Board Coordination, Strategy, Innovation and Risk Management, Domestic Taxes, Intelligence, Strategic Operations, Investigations and Enforcement, Kenya School of Revenue Administration, and Corporate Support Services.
The reinstatement of board powers is also seen as a response to concerns that the Finance Bill, 2024, which sought to further dilute board authority, was being pushed too quickly without adequate consultation or consideration of its implications. The committee’s move to ensure board approval of appointments is seen as a way to uphold the principles of good governance in the KRA, reinforcing that the board’s role in oversight is vital for the authority’s credibility and operational effectiveness.
A Streamlined Administrative Setup
The changes brought about by the KRA (Amendment) Bill, 2024, aim to streamline the agency’s administrative structure by giving the Commissioner General and the board a more defined role in staffing decisions. While the Commissioner General will continue to appoint deputies, the board’s role in approving these appointments provides an additional layer of oversight. This is seen as particularly important in a complex organization like the KRA, where quick decisions are needed to respond to the dynamic challenges of tax administration and enforcement.
By allowing the board to have the final say in the appointment of deputies, the KRA aims to create a more balanced and fair process that considers both the strategic needs of the agency and the principles of good governance. The new framework not only provides the Commissioner General with the authority to make decisions on staffing but also ensures that these decisions are checked by the board, promoting a more transparent and accountable management process.
Conclusion
The reinstatement of the KRA board’s powers to hire commissioners marks a crucial moment in the ongoing debate about the governance of public institutions in Kenya. The decision to amend the Finance Bill 2024 reflects a desire for a more balanced approach to leadership within the KRA, recognizing the need for oversight in critical decision-making processes. As the KRA moves forward, it will be essential for both the Commissioner General and the board to work together to maintain the integrity and effectiveness of the tax administration system, ensuring that it serves the public’s best interest effectively and transparently.
