Why KRA needs a Harvard-trained expert
Humphrey Wattanga Mulongo (insert). He was appointed Commissioner General of Kenya Revenue Authority on August 22, 2023.
In financial management, individuals of exceptional talent and brilliance occasionally emerge to lead transformative change. Humphrey Mulongo, the newly appointed head of the Kenya Revenue Authority (KRA), undoubtedly fits this description.
With his reputation as a finance and management genius, the Harvard and University of Pennsylvania graduate, Mulongo faces a full in-tray of challenges, including the pressing need to tackle tax evasion and instill professionalism within the KRA. His appointment heralds a new era for the agency, poised to make significant strides in revenue collection, combating tax evasion, and improving operational efficiency.
Tax evasion has long been a thorn in the economy, siphoning off much-needed revenue that could be invested in infrastructure, healthcare, education, and other essential services. The State of Tax Justice 2023 report prepared by Tax Justice Network indicates that global tax fraud costs nations $472 billion in tax revenue every year. Low-income nations continue to be more severely impacted by international tax evasion than higher-income nations do.
While higher-income countries experience the majority of annual tax losses ($426 billion), these losses are comparable to nine per cent of public health budgets in higher income countries. The tax losses in lower income countries ($46 billion) are equal to 56 per cent of their public health expenditures. To address this challenge, Mulongo must leverage his financial acumen and strategic thinking to formulate a comprehensive plan that leaves no room for tax evaders to exploit loopholes.
By employing advanced data analytics, artificial intelligence, and improved cross-agency cooperation, he can develop predictive models to identify potential evaders, enabling proactive interventions before significant revenue loss occurs.
Moreover, Mulongo can implement a two-pronged approach: Fostering a culture of voluntary tax compliance and applying stringent penalties for those caught evading taxes. Public awareness campaigns can educate citizens about the benefits of taxes and the negative consequences of evasion, creating a sense of social responsibility.
At the same time, implementing severe penalties will serve as a deterrent for potential evaders, showing that the KRA means business. One of the pressing challenges that have plagued KRA is a lack of professionalism and accountability. Reports of corrupt practices and inefficient processes have tarnished the agency's reputation, eroding public trust.
Davis Basweti Ombane, Nairobi
