Kenya Revenue Authority (KRA) has recently been in the news for all the wrongs reasons, with the worst being bribery allegations exposed by British Broadcasting Corporation touching on cigarette manufacturers BAT and Mastermind Tobacco. People Daily’s JAMES MOMANYI engaged KRA Commissioner General John Njiraini who got candid on the allegations and other issues the tax collector is grappling with.
Question: Allegations have been made against KRA, especially on its officials’ culpability on the bribery allegations involving two cigarette makers. Do the allegations hold water and how exactly was KRA involved?
Answer: First, at KRA, we take these allegations seriously and that’s why we have tried to explain what we know through the various press statements issued. The issue revolves around how we gather intelligence from different people and how we use it.
The insinuations that we use information from business competitors maliciously isn’t only inappropriate but also unethical.
Our policy allows us to get intelligence from wide ranging sources like members of the public, media, employees, competitors, business associations such as the Kenya Manufacturers Association and others regarding tax-related issues.
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Receipt of information from third parties is provided for by the KRA Act, which even has provision that allows us to pay informants for such information as long as it is credible.
There are allegations that KRA was bribed to get information—between 2007 to 2009— from one of the two cigarette makers and used it. I cannot confirm the information came from a competitor and it doesn’t real matter where it came from because information collection is provided for in KRA policy.
The only problem is that the information received from a third party was supposedly used for profit.
If ongoing investigations reveal that information provided to us in line with the law was used to benefit someone else or a rival company, then those involved will be dealt with. For now I cannot comment further because the issue is under investigation by an independent agency.
Q: The integrity of KRA has been put into question by these allegations, which have been in public domain for some time now. What has the authority done to repair its image and put the record straight?
A: First, we contacted the British Broadcasting Corporation (BCC),which first made public the allegations through their Kenyan office and sought the contacts of the whistleblower (Paul Hopkins).
We contacted Hopkins but he said he can only provide the information we wanted to a third party since we were adversely mentioned in the scandal. We directed him to share any information he had with the Ethics and Anti-Corruption Commission (EACC).
We then wrote to EACC and attached the letter from BBC containing the contacts of the whistleblower. We asked them to take up the matter and investigate.
Our main interest in the case is to know whether any of our staff benefitted from information legitimately provided by a third part. Any staffer found guilty will carry his/her own cross. They will be dealt with according to the law.
Q: Has KRA done anything to seal possible loopholes and avert such alleged schemes from occurring in future?
A: We are indeed doing a lot. Foremost, we have revamped our intelligence gathering framework. We are currently developing a web system which we plan to unveil in February.
This system will assist KRA in gathering of information from individuals and organisations on corruption and tax evasion. It will also expand our scope of data collection from third party.
Similarly, we are heavily investing in technology to reduce the rate of human contact, which is a great contributor to compromised staff in the event an individual or company wants to evade tax.
We are also restructuring our internal systems to ensure we have a high level, experienced and well trained personnel to develop proactive frameworks and linkages with various actors so that we can receive more information regarding those who may be engaging in underhand practices.
Q: Back to the BAT scandal, there are claims that there was a letter from the then Prime Minister Raila Odinga’s office directing KRA to stop freezing the accounts of Mastermind Tobacco over allegations of non-compliance. Did KRA receive the said letter and did it act on the request?
A: Yes, KRA received the letter but did not respond to it. However, I know there was a correspondence between the office and former KRA boss (Michael Waweru). KRA decision was that there was nothing we could do because there is a process that manages tax administration disputes.
If we have issued an assessment against a company and the company is dissatisfied, an appeal process is provided for. That is the procedure everybody follows.
There is no provision for us to receive instructions from anybody to stop progressing with tax demands. So we didn’t heed the request in that letter.
Q: What is the current status of the lifestyle audit of KRA staff ordered by President Uhuru Kenyatta in October last year?
A: The process is ongoing. We have engaged and discussed the process with EACC because it is the right body to handle this. We have forwarded to them all the details regarding the first lot of staff they should audit, starting with the senior officials and then cascade downwards until everybody is vetted.
In case EACC comes up with queries against any member of staff, further investigations will be conducted to determine the next course of action.
But let me point out that the process did not start with the President’s pronouncement in October (last year), we had started developing a framework for staff vetting a year and half ago. It has been going on since. The president’s pronouncement only drove the sense of urgency to the process.
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