Cabinet Secretary nominee in the Ministry of Treasury and National Planning John Mbadi has proposed the need to conduct an open heart surgery at the Kenya Revenue Authority (KRA).
Speaking on Saturday, August 3, 2024, while facing the Committee on Appointments to defend his suitability to head the Treasury docket, Mbadi proposed the re-engineering of the KRA system.
The nominee told the lawmakers sitting in the Committee of Appointments that his first assignment would be convening a consultative meeting with KRA officials if approved to occupy the money docket.
Mbadi explained if approved, he would suggest remodelling the current system used to collect taxes since it is not effective. While defending his proposal, Mbadi compared the current system to a cow which is being milked without being properly fed.
“The solution is proper revenue collection targeted by KRA. KRA needs reengineering especially custom duties where we lose a lot through smuggling. There was a time when KRA had a great training programme which worked very well and prepared KRA officials for work.
“You must have properly trained accountants to collect tax. I will have a seating with KRA to look at how we can reform that institution to help reduce wastage and avert fiscal deficits,”Mbadi stated.
Besides meeting KRA, Mbadi proposed the simplification of some tax measures and policies. The lawmaker told the committee that some Kenyans fail to honour their obligations due to complex tax measures adopted by KRA.
“Some tax policies are complicated causing tax apathy. When taxpayers realise that it is very difficult to pay, they will not comply.”
Moreover, John Mbadi pledged to seal loopholes causing massive proliferation especially during tax refunds.
John Mbadi: A lot has been said about revenue mobilisation. KRA is like a cow which we milk without feeding. Look at the system KRA is using at the moment, it needs re-engineering. My first task will be to have a sitting with KRA and look at how we can reform that institution.… pic.twitter.com/2vO9gNZ6xU
— K24 TV (@K24Tv) August 3, 2024
Raising Ksh600 billion
Further, Mbadi argued that the government could raise an additional Ksh600 billion in revenue if the government reverted to tax measures it applied in previous years.
The former ODM party chairman indicated that during the previous years, the country collected 18 per cent of the Gross Domestic Product (GDP).
“If we could just increase from 14% to 18% of GDP, you would be adding about 600 billion to our revenue base. So, you will be reducing the fiscal deficit and the fiscal gaps that we have,” he noted.
