Kenya tax body to reorganise as staff lose jobs

Saturday February 07 2015

From right, KRA Commissioner General John Njiraini, chief manager marketing and communications Maureen Njonjo and Commissioner for Domestic Taxes Alice Owuor during a briefing on the SGR at Times Tower. PHOTO | FILE

An estimated 1,600 workers at the Kenya Revenue Authority’s Customs Services Department could be laid off in a major reorganisation meant to facilitate trade, improve efficiency and effectiveness in revenue collection and secure Kenyan borders.

The move is part of the joint implementation of the Single Customs Territory (SCT) with Kenya’s East African counterparts. The EastAfrican has learnt that the major victim in the restructuring process directed by President Uhuru Kenyatta is the Commissioner for Customs Services Department whose position is to be re-advertised.

It remains unclear which other jobs are likely to be affected after the authority’s board agreed on a new structure for the department that will collapse several divisions into two with key focus on security along Kenyan borders.

Under the planned arrangement, the revamped department will be headed by one commissioner and two deputy commissioners who will be in charge of the Revenue and Border Security Divisions. The department will also change its name from Customs Services Department to Customs and Border Control Department.

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“This is something that has been decided by the board,” Kariuki Githigi, an officer from the department told The EastAfrican last week. “It’s all about focusing on security matters.”


At present, there are several divisions within the Customs Services Department. These are the Compliance Division, Policy Division, Revenue and Regional Operations Division, Support Services Division, Co-ordinated Border Management Division, Projects Office Division and Trade Facilitation Division, which deals with valuations, exemptions and duty remissions.

Under the new structure, all these functions will be transferred to the Revenue Division save the co-ordinated border management function, which will be moved to the Border Security Division.

The Border Security Division will handle all matters related to security in collaboration with other government agencies such as the police, National Security Intelligence Service (NSIS), Kenya Bureau of Standards (Kebs) and Kenya Plant Health Inspectorate Services (Kephis).

“The Customs and Border Control Department will eventually take the lead role over all other agencies on security matters,” said Mr Githigi.

“The commissioner’s position is going to be advertised while the positions for the two deputies can either be filled internally or be advertised as well.”

KRA has a total workforce estimated at 5,000. In 2013, President Kenyatta directed that the Kenya Revenue Authority be reformed to make it responsive, efficient and effective in revenue collection, trade facilitation and securing Kenyan borders.

“In this endeavour, we are partly informed by recent border security challenges, as well as the East African Community Common Market Protocol, which requires the establishment of a Single Customs Territory. The effect of that is free movement of goods around the region,” said President Kenyatta.

The reorganisation of the tax body, he said, would see the establishment of two semi-autonomous entities, the Domestic or Inland Tax Agency and the Customs and Border Control Agency.

Sources told The EastAfrican that the government established a taskforce in October last year comprising senior government officials to consider ways of delinking the Customs Services Department from KRA.

It has also constituted a high level border control and operations co-ordination committee to formulate policies and programmes for the management and control of designated border points, set compliance standards and play an oversight role.

The committee comprises the Principal Secretary of Security, the Principal Secretary of Health, the KRA Commissioner General, the Director of Immigration, the Inspector General of Police, the Director of the Kenya Airports Authority, the Managing Director of the Kenya Ports Authority, the Director of NSIS, the Director General of the Kenya Maritime Authority and Kebs.

Under the Single Customs Territory, the five partner states of Kenya, Uganda, Tanzania, Rwanda and Burundi are regarded as one Customs territory so only one Customs declaration needs to be made in the country at which goods are consigned.

Apart from the tiresome Customs inspection, vetting by quality regulators and immigration officials will be eliminated at internal border points such as Busia, Namanga and Malaba.

KRA’s Customs Services Department, formerly known as the Customs and Excise Department, was created by an Act of Parliament in 1978. Its key function is to collect and account for import duty and VAT on imports.

Other taxes collected by the department on an agency basis are the petroleum development levy, sugar levy, road maintenance levy, import declaration fee (IDF), road transit toll, Directorate of Civil Aviation fees, the air passenger service charge and KAA concession fees and fees on motor vehicle permits

The department implemented the Simba 2005 web based system and discarded the semi- automated system known as Boffin. The Document Processing Centre was established to replace the traditional long rooms countrywide. The department is a one-stop centre for online document processing and validation.