revenews - Kenya Revenue Authority

Transcription

revenews
KRA’s in-house staff quaterly newsletter Edition No. 22 December 2004
KRA HONOURS DISTINGUISHED
TAXPAYERS
Chairman, Board of Director,s Lenny Mwangola presenting KRA’s donation to the Save a Life Fund to his H.E. the President,
Hon. Mwai Kibaki on 8th October 2004 at State House, Nairobi. Next to him is Commissioner General Mr. M. G. Waweru.
Behind is Board Secretary Mrs. F. W. Ng’ang’a.
S
plendour and excitement were the descriptive
words for the ceremony KRA hosted to honour
distinguished taxpayers for the year 2004 at the
Kenyatta International Conference Centre on 21ST
October 2004. It was a big day for Kenya Breweries
Limited, Kobil Oil Kenya and Safaricom Limited, which
scooped the top three awards respectively. Mr. James
Musyoki, MD - KBL, Mr. George Mwangi- Assistant
Group MD Kobil Oil Kenya Ltd. and Mr. Michael
Joseph- MD Safaricom Ltd. were all smiles as they
wheeled away the top three awards presented by the
Minister for Finance, Honourable David Mwiraria on
behalf of His Excellency President Mwai Kibaki.
The colourful ceremony was a culmination of a week's
activities that begun on the 18th of October 2004 with
Tax Clinics that were conducted within some of KRA's
regions covering Nairobi, Mombasa, Kisumu, Nakuru,
Kericho, Nyeri, Thika and Embu.
The three companies were among the 100
distinguished taxpayers that KRA honoured during the
occasion. Other firms that topped the list were Barclays
Bank for "Withholding Tax", Mumias Sugar Company
for "VAT", DT Dobie for "Customs & Excise", Toyota
East Africa for "Road Transport".
To witness the auspicious occasion were delegates
from Uganda, Tanzania and Rwanda, KRA's Board of
Directors led by the Chairman Mr. Leonard Mwangola,
Ambassadors and High Commissioners and top KRA
managers.
The Nation Television beamed the colourful ceremony
live. A battery of journalists from other media houses
was present to record the event as KRA made history
by hosting the first of such occasion in the East Africa
region.
The theme for the week was Kulipa Ushuru ni Kulinda
Uhuru, a message that encapsulates the fact that no
country is completely free without total economic
freedom.
Caroline Nderitu resplendent in a light blue flowing
outfit and an elaborate head gear, recited The Making
of Freedom, a poem congratulating the 100
distinguished taxpayers for making Kenya free through
payment of taxes and urging those that are not giving
Caesar his rightful due to do so and take advantage of
the Tax Amnesty that expires on 31st December 2004.
Her introductory poem was Rogger Whittaker's My
Land is Kenya. For this poem, she wore the Kenyan
flag and spellbound her audience as she spoke about
Kenya in the backdrop of the instrumental version of
the song.
By Maureen Njongo
02 Contents
Editorial
P 1 Distinguished Tax Payer's Day
W
elcome to yet another
edition of our quarterly inhouse newsletter. A lot has
P 3 CG's speech on the taxpayers day
happened since the last edition.
Kenya Revenue Authority has been
P5
Set our country free
awash with activities during the last
Marriage of Convenience
quarter. For the first time the
authority devoted a whole week to
Tax & illegal trade
P6
say thank you to Taxpayers and
also try and get more on board.
Joke - a professional 5 - yr old
The theme of the Taxpayers'
Mission statement
P7
week "Kulipa ushuru ni Kulinda
Uhuru" set the tone for the
Innovation and leadership
chain of activities that KRA
had lined up for our
Judicial Review
P8
e s t e e m e d Ta x p a y e r s
P9
Good Karma
throughout the country.
This newsletter is devoted
Common approach
to bring you in words and pictures the spirit of Taxpayers'
week!
Kutoa ni moyo
P 10
P2
Editorial
P 11
Mwiraria's speech
P 12
My land is Kenya
P 14
Chairman's speech
P 15
Distinguished tax payers
P 16
Taxed to death
P 17
Down under
P 18
Travel advisory
A rose by other name
P 19
Tips for taxpayers education managers
E - learning
P 20
Malaysia
P 21
Navigating the transformation waters
P 22
Taxpayer education tips
Do it while it lasts
P 23
Somalia UN security council
Zero tolerance to corruption
P 24
The making of freedom ( poem)
Revenews Edition 21 2004
The Tax Amnesty programme also saw us criss-cross the
country to appeal to Taxpayers with previously undisclosed
taxes to take advantage of this one time opportunity for a
fresh start. The outdoor advertising has put KRA in the
limelight albeit some taxpayers claims that the black &
white no nonsense text sends shivers down their spines.
As the year comes to a close it is time of reflection as we
take stock of what the year was like. At the individual level
it can either be a time of great excitement, anxiety or even
regret as you watch the year while away. From the editorial
team, ours is to thank our readers and contributors for
their support without which, we would not be able to
move on with the newsletter. We also like to wish you all
the best during the coming end year festive season.
Happy & prosperous 2005
Welcome!
Fatma S. Yusuf - Managing Editor
REVENEWS TEAM
Lucy Njoe - SAC - Southern Region
Creck Buyonge - SAC - Operations
Maureen Njongo - SAC - Customer Care
Jeddy Ochuodho - AC - DTD
Salma Bashir - AC - RTD
James Oiko - AC - C&E
John Kipkosgei - PRO - Hqs
Julie Onyuka - PRO - DTD
Kendi Kinuthia - PRO - Hqs
Dan Majanja - Associate Editor
Maximilla Onyango - Design & Layout
03
COMMISSIONER GENERAL ADDRESSES DISTINGUISHED TAXPAYERS
M
inister of Finance, Hon. David Mwiraria, Honourable Ministers
and Members of Parliament, Permanent Secretaries and
other Government Officials, Your Excellencies Ambassadors
and High Commissioners, The Chairman and Members of the KRA
Board of Directors, Distinguished Taxpayers, Ladies and Gentlemen,
I would like to begin by thanking you all for taking time off your busy
schedules to join us in these celebrations for the Kenyan taxpayers.
We are particularly honoured by the presence of the Minister of
Finance, Honourable David Mwiraria, other Ministers and senior
Government officials present here today.
This taxpayer's week is the first of its kind. However, this is the second
year for us to recognise and honour outstanding Kenyan taxpayers.
We have amongst us
representatives from the
revenue authorities of Uganda,
Tanzania, Zambia and Rwanda
who are here today to show
their solidarity with us. Kenya
Revenue Authority (KRA) has
similarly been a privileged
guest in the taxpayer's day
celebrations of our
neighbouring countries. In
March this year for example,
KRA was represented at the
Rwanda taxpayer's day by a
delegation of three led by our
Board Chairman, Mr Leonard
Mwangola.
In the course of this taxpayer's
week, we have been running a
series of countrywide activities
including tax clinics, media advertisements, outreach activities to
students in colleges and universities and we have made donations to
children's and elderly people's homes. We want to recognise the
important role of wider society in facilitating our operations and to
exercise our corporate social responsibility by giving back to society in
timely occasions such as this.
Ladies and Gentlemen, Today, I will begin by highlighting the notable
achievements that we have made as KRA in revenue collection and
service delivery over the recent past. During the financial year
2003/04, KRA collected a total of Kshs. 229,276 million against a
target of Kshs. 220,800 million representing a revenue surplus of
Kshs. 8,476 million. This is a performance rate of 103.8% and a growth
rate of 13.7% compared to the previous financial year 2002/03.
This commendable performance can partially be attributed to
favourable economic environment as well as the aggressive
implementation of several tax administration reform measures. I am
happy to note that this positive trend has not only sustained but
accelerated further into the first quarter of 2004/05.
During the first quarter of 2004/05 (July - September 2004), we
collected a total of Kshs. 64,563 million against a target of Kshs.
55,724 million. This represents a revenue surplus of Kshs. 8,839
million or a performance rate of 115.8%. Compared to the first quarter
of last year, (July - September 2003) revenue grew by Kshs. 13,801
million or 27.2%. All revenue heads classified by Broad Economic
Category performed exceptionally well as follows:
B Trade Taxes increased by 28.9% mainly as a result of the
depreciation of the Kenya Shilling and continuous implementation
of administrative reforms.
B Fees and Licences increased by 35.2% due to the continued
implementation of revenue administrative reforms and positive
results of the reforms in the Transport sector.
B Indirect Domestic Taxes increased by 40.8%, a reflection of the
success of the introduction of the withholding VAT system which
contributed a total of Kshs. 2.9 billion during the quarter.
B All categories of Petroleum Taxes reported significant increases in
revenue as a result of the implementation of administrative measures
that have streamlined the sector. In total, petroleum taxes collections
increased by 22.1%.
B Direct Domestic Taxes registered a growth of 20.7% mainly due to
improved prospects for growth and profitability. Corporation Tax, for
example, registered a growth of 25.4%.
Ladies and Gentlemen, as earlier mentioned, this performance is
largely as a result of the
continued implementation of
comprehensive tax
administration reforms which
include the following:
B Intensifying the integration
of functions across all
domestic taxes through the
development of integrated
operational structures and
implementation of
integrated audits. This
yielded efficiency gains as a
result of the harmonisation
and improvement of
business procedures and
the exchange of information.
B The implementation of an
automated cash receipting
system in the Road Transport Department was expanded to cover
additional towns. Similarly, additional automated cash receipting
counters were opened at Times Tower to ease the congestion and
improve service delivery. As a result of this initiative, revenue
collection in these stations has significantly been boosted.
B The implementation of direct bank payment of customs duties was
also rolled out to the Southern, Western and Rift Valley Regions,
specifically in Mombasa, Kisumu, Nakuru and Eldoret.
B The installation of a mobile X-ray scanner at the port of Mombasa has
also greatly enhanced the clearance time of goods and improved
revenue collection through detection of misdeclarations.
B The integration of the Investigation and Enforcement function
continued to yield positive results in the protection of revenue. A
number of high profile tax evasion rackets were busted with
significant revenues being collected. Collaborative arrangements
with other Government agencies have also been put in place with a
view to enhancing the integrity of the tax system.
B The aggressive implementation of the Tax Amnesty 2004 has
resulted in a good response rate. During the quarter, a total of 700
cases were processed with a total of Kshs. 400 million being
collected. This is expected to pick up during the second quarter of
2004/05 as taxpayers rush to beat the amnesty deadline due for
31December 2004.
Ladies and Gentlemen, The above achievements are mainly gains
arising from implementation of quick win measures. However, we have
now embarked on the implementation of a comprehensive Revenue
Administration Reform and Modernisation Programme with the
following objectives:
B Promote effectiveness through modernisation of KRA's management
and operational structures.
Kulipa Ushuru ni Kulinda Uhuru
Continued on Page 4
04
COMMISSIONER GENERAL’S SPEECH
B Improve revenue collection through adoption of compliance and
enforcement strategies based on risk assessment.
B Enhance efficient utilisation of resources through integration of
functions across KRA.
B Facilitate efficient and timely exchange of information amongst
departments.
B Improve services to taxpayers through adoption of simple,
transparent and up-to-date procedures that take a single view of the
taxpayer and by adopting more modern audit and IT based
solutions.
B Improve staff skills competency and productivity.
This programme comprises of seven key projects addressing different
aspects of revenue administration specifically:
Customs Reform and Modernisation - This project seeks to transform
customs into a modern customs administration in accordance with
appropriate WTO agreements and the WCO revised Kyoto
Convention. It entails comprehensive business process improvement,
modernisation and automation.
You will be interested to know that we have already finalised a
comprehensive Time Release Study (TRS) meant to review the
clearance time taken to release imported goods at various ports. The
preliminary findings for instance indicate that at our Airports, the mean
time taken to release imported goods is 2 days, 10 hours and 3
minutes where an entry is lodged before arrival of the carrier and 5
days, 14 hours and 29 minutes where the entry is lodged after its
arrival.
At our Land Border Posts we found that the mean time taken to release
imported goods is 12 hours, 1 minute where an entry is lodged before
arrival of the vehicle and 21 hours, 41 minutes where the entry is
lodged after its arrival.
At the Seaports where most imports are processed, the mean time
was found to be 5 days, 3 hours and 46 minutes where an entry is
lodged before arrival of the vessel and 15 days, 23 hours and 33
minutes where the entry is lodged after its arrival.
The findings also indicate that all the parties involved in the clearance
of cargo contribute to these statistics. This spells the urgent need for all
stakeholders to develop modern systems and implement reforms in
order to meet international best practice standards on clearance
times.
On our part, we hope to address these challenges by objectively and
comprehensively tackling these hurdles through the customs reform
and modernisation project. Other players including Kenya Ports
Authority, Kenya Bureau of Standards, KEPHIS and Clearing and
Forwarding Agents, who took part in the study are also called upon to
take any necessary action.
Specifically I would like to urge all stakeholders to play their part in
facilitating the smooth flow of goods. All necessary customs
regulations must be observed in order to avoid any unnecessary
delays. For example, where goods are required to be inspected prior
to shipment, this must be done. All importers and their agents should
strive to make the correct declarations and lodge all necessary
documentation prior to the arrival of the vessel. This will enable early
processing of documentation and payment of relevant taxes and in
case of any queries arising thereof, these will be resolved before the
arrival of the goods.
I want to assure you that we shall carefully review the findings of the
TRS and fully implement its recommendations. In any case, this study
forms the basis against which we shall measure improvement in
goods release time as we implement our reforms.
Domestic Taxes Reform and Modernisation - This project seeks to
embrace best practice standards in domestic tax administration
through integration of tax heads such as income tax, VAT and Excise
duty, strengthening of the Large Taxpayer Office and development of a
simplified tax regime for the informal sector.
Road Transport Reform and Modernisation - This project seeks to
simplify administrative procedures, modernise and automate road
licensing operations.
Investigation and Enforcement Reform and Modernisation - This
project seeks to enhance KRA's capability to efficiently and effectively
detect, prevent and punish tax and economic fraud through capacity
building and establishment of an intelligence function.
Infrastructure Development - This project seeks to enhance the
capacity of KRA to respond to the various needs of stakeholders by
upgrading KRA infrastructure and implementation of modern KRAwide taxpayer education, integrity and security programmes.
KRA Business Automation - This project seeks to promote integration
effectively through implementation of an enterprise-wide IT strategy
for KRA which promotes effective integration and seamless sharing of
information, and is secure.
Training and Change Management Project - This project seeks to
upgrade and diversify KRA's skill base and implement change
management programmes.
Ladies and Gentlemen, the implementation of quick win measures in
our reform and modernization programme has already begun to bear
fruit. Revenue collection and tax compliance are at their highest levels
ever and are rising. We have continued to improve our services and I
am happy to state that we are currently enjoying the fruits of the best
relationships with our stakeholders ever.
We expect the full implementation of the reform agenda to further
boost KRA's performance and capacity to catch up with past tax
defaulters. At this juncture I wish to also request all taxpayers to take
advantage of the current tax amnesty to streamline their past tax
defaults. I can state that following the implementation of the reforms,
there will be very little room for tax defaulters to manoeuvre after the
December 31 deadline of the tax amnesty. I urge you all to seize this
window of opportunity and start on a fresh tax slate.
At the regional level, we will continue working with other regional
revenue authorities to exchange best practices, undertake training
programmes and exchange human and physical resources in line with
the spirit of the EAC and COMESA. We will continue to closely work
with development partners such as the World Bank, IMF, DFID and
USAID, among others, to tap the much needed resources and
expertise to complete our reform programme.
Ladies and Gentlemen, in conclusion, I wish to express my sincere
appreciation and that of the Board and Management of KRA to our
principals at the Ministry of Finance for the firm support they have
accorded us all through. We are certain that we will surpass our current
revenue target for the financial year which stands at Kshs. 240 billion.
Coupled with the increasing mood of cooperation from taxpayers, I
want to express confidence that KRA can achieve and surpass any set
performance criteria if we continue to work together in the spirit and
theme of today's celebrations - 'Kulipa Ushuru ni Kulinda Uhuru'. I wish
to end my remarks by quoting His Excellency the President
Honourable Mwai Kibaki's Kenyatta Day Message to the Nation
delivered on 20th October 2004.
''Our responsibility to build this country involves prompt payment of
taxes. It is the taxes that we pay that enable the Government to provide
social services. It is, therefore, important that we all make honest
declaration of the taxes that are due to the Government. We cannot
continue relying on loans and donations from foreign countries. I,
therefore, urge all of you to pay your taxes and set our country free.''
Thank You
M. G. Waweru
Pay your taxes, set our country free
05
SET OUR COUNTRY FREE!
Creck Buyonge
H. E. President Mwai Kibaki made a passionate call to Kenyans to pay their
taxes promptly in his speech to the nation on the occasion of this year's
Kenyatta Day celebrations. His speech was unique in various respects: for the
first time, the six heroes of Kenya's independence struggle who were arrested
on 20th October 1952 by the colonial government were collectively
recognized as heroes that "were willing to sacrifice everything including their
own lives to win our freedom."
Of the two surviving "Kapenguria Six" only Mr. Achieng' Oneko attended the
ceremony held at Nyayo Stadium, Nairobi, Mr. Bildad Kaggia was ill and
therefore unable to attend. The four deceased members of the group include
Kenya's founding father Mzee Jomo Kenyatta, Paul Ngei, Kungu Karumba
and Fred Kubai.
"….It is the taxes that we pay that enable the government to provide social
services. It is therefore important that we all make honest declarations of the
taxes that are due to the government. We cannot continue relying on loans
and donations from foreign countries. I therefore urge all of you to pay your
taxes and set our country free." The President said.
The President used the occasion to send a strong message on his
government's commitment to fight corruption. The president's message
coincided with the release of a Transparency International's Corruption
Perception Index showing that Kenya had made modest gains against actual
and perceived corruption.
He said the following on corruption: "Together, we should fight corruption
which takes away resources from the public for personal gain. This selfish and
criminal behaviour is unpatriotic and unacceptable. Corrupt people are lazy.
They are opportunists who want to harvest where they have not planted. We
should all fight these greedy people".
His speech aptly captured the spirit of a new Kenya in a call to public servants
that… "they must understand that their level of performance determines the
rhythm of development in this country" and therefore " must implement
policies, programs and projects in a timely manner".
On his part, the Permanent Secretary in the Ministry of Finance, Mr. Joseph K.
Kinyua said taht the Ministry joined KRA in recognizing and honouring
taxpayers for their contribution to government revenue. He added that the
government… "is fully committed to use taxes and other revenues to support
programmes which increase economic growth, and create wealth and
employment so as to reduce poverty". These programmes include the free
primary education, rehabilitation of roads and other transport systems, rural
electrification, provision of clean water and initiatives to combat HIV/AIDS.
Mr. Kinyua said in his Accountability Statement that… "the challenge to each
and every one of us is to enhance tax compliance, pool resources and fund
our collective investments," as he echoed President Kibaki's call to Kenyans
to pay their taxes and set themselves and the country free.
Meanwhile, the Secretary General of the World Customs Organization, Mr.
Michel Danet has commended the Kenyan Government and Kenya Revenue
Authority for taking the initiative to publicly recognize the invaluable
contribution made by taxpayers to the Government's revenue generation
efforts.
Mr. Danet, a strong proponent of the concept of economic freedom as a
significant contribution of the role of customs, sent the message on the
occasion of the Taxpayers' Recognition Day, organized by KRA on 21st
October 2004 as the high point of a weeklong series of activities dubbed the
Taxpayers' Week.
"Indeed, your initiative will certainly generate an enormous amount of
goodwill which will considerably ease your administration's further work in
this regard," Mr. Danet said.
Asked to comment on the President's remarks in support of KRA's campaign
to create awareness on our collective obligation to pay taxes and support the
government's economic recovery programme immediately after Kenyatta
Day, a visibly elated Commissioner General M. G. Waweru said that the
public support provided a significant boost to our efforts.
"We have seen the difference this kind of support can make. The President's
remarks fitted in very well with the theme of the Taxpayers' Week," the
Commissioner General said. "His speech recognized all our heroes and
heroines, from the heroes of the independence struggle, our sports
celebrities, and Prof. Wangari Maathai, Kenya's recent Nobel Peace Prize
laureate."
A MARRIAGE OF CONVENIENCE
Julie Onyuka
The Formation of
Domestic Taxes Department
First came Reform and Tax Modernization, then came the
integration of VAT and Income Tax then the formation of "THE
DOMESTIC TAXES DEPARTMENT", "DTD" or "TTT" in the
western region - headed by Commissioner Jack N. Ranguma.
The integration of VAT and Income Tax brings together a
multiplicity of 'Cultures', where different departments have a
certain ways of doing things.
We have all come from
different backgrounds, orientations, and perceptions. We
therefore may not see eye to eye on all issues.
DTD has a revenue Target of KShs. 142.4 Billion (Corporate
Plan Target) for the current financial year, an uphill task, given
that last year the combined collection was KShs.122.9 Billion.
The expected growth based on the actual collection is
therefore 15.9%.
The Commissioner is optimistic, however, that the target will
be met or even surpassed, with dedicated staff and new
strategies in place. To achieve this, the Department has
embarked on the training of its staff to have an appreciation of
both the VAT and Income Tax Acts. Merging of the collective
Income tax Balanced Score Cards (BSC's), Stations, and
Programmes is also in progress.
Change, they say, is inevitable. Change and transition can be
the most traumatizing experiences for employees in any
organization. Organizations can minimize the negative
impact of change within their structures by planning
strategically, providing information and involving employees.
It is for this reason that an in-house Change Management
Seminar was conducted for all staff in DTD.
Team building at White Sands, Mombasa
The Commissioners' Conference - the first of its kind - was held for
the Domestic Taxes Department at the Whitesands Hotel,
Mombasa. The conference had 140 delegates drawn from DTD
stations countrywide and was attended by the Regional Managers.
The function was graced by the Registrar of Motor Vehicles,
Mr.Simeon Kirgotty, and was officially opened by the Commissioner
for Support Services, Mr. Mumo Matemo, on behalf of the
Commissioner General.
The delegates at the Conference had a chance to engage in team
building activities, aimed at providing guidance, through teamwork,
on improvement in performance, customer service and workrelationships.
Conflict is an inevitable part of our lives, even at work. But it does
06
TAX AND ILLEGAL TRADE
M. M. Maina
T
here are new sayings for Nairobians… One man's donkey is Consequently profit from punda choma business should be subjected
another man's meat and a Zebra in the bush is worth a to tax just like nyama choma business. The same for the trade in
hundred kilos in the Butchery.
bandit parts, abortion services as well as the trade in human flesh by
Some unscrupulous butchers have discovered that the easiest way of harlots.
making profit is by selling donkey, Zebra or buffalo meat to Countries like Holland, Germany and Thailand have encouraged the
thriving of sex trade and the commercial sex workers have formed
unsuspecting beef-and-mutton-eaters.
Not to be outdone are the peddlers of human flesh who trade in items trade unions and promoted their trade through various forums
that have been given freely to them by God. Koinange Street is the including the internet. In the year 2003, as a result of dwindling
embodiment of this trade where "love" is bought cheaply since there revenues, German cities decided to slap a tax on visitors of brothels.
are no strings attached. In addition some massage parlours are This leisure tax is collected by Commercial sex workers and paid over
providing massage services together with a sweetener for amorous to the local authorities.
Granted that man has refused to fear and worship God and gone
men.
Illicit trade is also in the vehicle and spare part sector where a vehicle ahead to fear losses and poverty, and to worship money, all business
is capable of being converted into spare parts at the twinkling of an profit should be subjected to tax regardless of legal or moral
eye. This has brought about unfair business practice since the considerations. And now that man has decided to worship the god of
genuine spare part dealers have had to compete unfavourably with profit, the only solution is to unleash the tax collector on him, so that
the bandit part dealers. The genuine spare part dealers acquire their Ceaser gets his share of this profit, notwithstanding that it is a dirty
goods at arm's length while the bandit part dealers do so at gun's cake.
Nevertheless, KRA has come out fighting against illegal and unfair
length giving the later a higher profit margin.
Having analyzed what happens to the poor ass in the butchery, the trade practices. This is evident in the war against counterfeit goods.
amorous men in the massage parlours and the gunpoint traders, Actually, Revenue Authorities should join hands with other agencies to
which are by no means the only illegal transactions going on in fight against illegal and immoral transactions that are a threat to the
Nairobi, it is now time to turn to the taxation aspect of these dealings. society. Such transactions include trade in drugs, trafficking of
The question to ask is: Are profits generated from illegal children, abortion works and trade in stolen vehicles just to mention a
few.
transactions taxable?
Though it sounds uncouth, court rulings made in the past two For past profits the traders may be taxed so as to reduce their
centuries indicate that profits from illegal transactions are taxable accumulated profit and wealth but they should also be prosecuted for
This may require amendment and
since illegality is not a barrier to taxation. In the case of Mann versus engaging in illegal trade.
harmonization
of
several
laws,
which
will be for the good of the nation
Nash, the taxpayer argued that since he was operating four gambling
and
its
people
as
well
as
a
way
of
pleasing
God, the master of law and
machines, income from two of them should not be subjected to tax
because they were prohibited gaming machines. The court ruled that order. Such measures will enhance law and order and promote fair
the income from all the machines, including the unauthorized business practices which are good in this era of transparency, good
Good practices should be
machines should be subjected to tax. Technically this ruling legalized governance and accountability.
manifested
in
the
business
and
private
sector notwithstanding the
the taxation of income from illegal transactions.
fact that people are yearning for the same in the public sector.
WANTED: A PROFESSIONAL 5 - YEAR OLD!
Humour
I got this from the Internet and I found it interesting enough to share.
The following short quiz consists of four questions and tells whether
you are qualified to be a "professional." The questions are not that
difficult so don't cheat by looking ahead!
Questions 1: How do you put a giraffe into a refrigerator?
Answer: Open the refrigerator, put in the giraffe and close the door.
This question tests whether you tend to do simple things in an overly complicated
way.
Question Number 2: How do you put an elephant into a refrigerator.
Wrong Answer: Open the refrigerator put in the elephant and
close the refrigerator
Correct Answer: Open the refrigerator, take out the giraffe
put the elephant and close the door
This tests your ability to think through repercussions of your actions
Question Number 3: The lion king is hosting a an animal conference. All
the animals attend except one. Which animal does not attend?
Correct Answer: The Elephant. The Elephant is in the
refrigerator Remember?
This tests your Memory
OK even if you did not answer the first three questions
correctly, you still have one more chance to show your
abilities.
Question Number 4: There is a river you must cross. But
crocodiles inhabit it. How do you manage?
Correct Answer: You swim across. Why? All the
crocodiles are attending the animal conference.
This tests whether you learn quickly from your mistakes
According to Anderson Consulting Worldwide, around
90% of the professionals they tested got all questions
wrong. But many preschoolers got general correct
answers. Anderson Consulting says conclusively
disapproves the theory that most professionals have the
brains of a four year old. Share this and frustrate all
your friends.
07
Statement
MISSION ACCOMPLISHED!
Ismail M. Farah
enya Revenue Authority surpassed its target during the just
ended financial year due to the comprehensible policies and
sound management practices, backed by an all time high
productivity by the entire KRA staff.
While launching the very successful Taxpayers Week, the
Commissioner General, Mr. M. G. Waweru underscored the
Authority's potential to raise Kshs 260 billion, an 8.3% increase
over the KShs 240 billion target for this financial year.
While it is an enormous task, it is my sincere hope that all of us will rise
to the occasion and take responsibility by ensuring we attain our
individual targets. It is of great importance for all of us to visualise
where we are going, in relation to our vision statement…
"To be the leading revenue authority in the world respected for
professionalism, integrity and fairness"
"If you do not know where you are going, any road will take you there"
- an old proverb.
K
The KRA vision addresses the larger picture; a corporate "heaven"
which our organisation aims to attain… It refers to our future state or
condition, which must definitely be better than the present.
Our vision statement enables us as employees to focus on our mission,
while travelling the road that will lead us to our heaven.
Professionalism - A commitment to the highest standards of
achievement obtainable through dedication and superior skill.
Integrity - A commitment to honesty and reliability in our interaction
with our customers
Fairness - A commitment to applying the law consistently justly,
impartially and rationally as well as administering our requirements
reasonably
These are our stated values, consistent with our corporate and
strategic plans. These values are the most important links between
our purpose and our behavior as both managers and employees.
To promote compliance with Kenya's tax trade and border legislation and regulation by promoting the standards set out in the Taxpayer's
Charter and responsible enforcement by highly motivated and professional staff thereby maximising revenue collection at the least possible
cost for the socio-economic well being of Kenyans.
INNOVATION AND LEADERSHIP
Heather Bodo
Innovation is risky. Adopting an approach that is different from what a
business, industry or individual has known requires a shift away from
the "tried and true" - which is, even when it is not the most efficient, the
most customer-focused or even the most sustainable approach, the
most comfortable. People generally are averse to change and are
especially reluctant to try it in times of crisis.
There is plenty of evidence to support the need for, and value of,
innovation as a competitive differentiator. Yet, many factors discourage
both new and seasoned leaders from embracing innovative thinking
and approaches.
The longer a leader has been at a role, the more challenging it
becomes to think differently about it. Underlying assumptions and
ways of doing things tend to become entrenched over time. The more
history a leader has with an organization or function, the more the
"been there, done that" feeling persists. Leaders who have spent their
whole career in a particular industry or organization may not have any
reference points for new approaches.
The way leaders are measured can also discourage them from
espousing innovation. It has long been known that compensation
drives behaviour. Leaders who are measured on adopting innovation
will be much more likely to support new approaches than leaders who
are not.
In theory, leaders who are newer in their roles are in the best position to
support innovation, since they have not yet become entrenched or
invested in the status quo. Yet, developing and implementing new
approaches can be challenging for them as well.
The expectation for new leaders to quickly demonstrate results can
undermine innovation since new ways of working require some time
before the positive impact can be seen. New leaders know that their
success will be least in part determined by how well they fit into the
organization. Inherent in the notion of fitting in, then, is operating in a
way that doesn't rock the boat too much or go against accepted ways of
doing things.
Because of the risk associated with trying something new and the
degree of effort required to implement change, people will avoid taking
the risk unless there is a highly compelling reason to do things
differently. Thus, the need to do things differently does not usually
become strong enough to drive action until a business is facing a crisis.
And yet, people are the least inclined to pursue innovative approaches
and take risks when the pressure is highest to improve performance.
One senior vice president of marketing and business development in
the pharmaceutical industry noted how, in sports, you may think you
are at the top of your game until you work with a coach who shows you
how much better you can be. This is often referred to as "unconscious
incompetence" - when you don't know what you don't know.
Some leaders may be fortunate enough to have peers, a boss or even
team members who challenge their thinking. However, many leaders
have indicated to me that opportunities to have their views challenged
and gain new insights often diminishes with experience.
How can leaders overcome the innovation inhibitors?
They must recognize innovation as critical to sustaining and
differentiating their businesses and demonstrate that belief in their
actions and words.
Leaders need to demonstrate their belief in this important concept
through their own efforts to pursue innovation, through their
encouragement of others and through the priorities that they establish.
How can leaders do this? Examine challenges and opportunities from
different perspectives. Watch your customers in action. Ask
provocative questions such as
How might a customer or supplier see this?
How would we deal with this if we were in another
function/company/industry?
What if constraints were removed?
What if anything were possible?
What if…
Create opportunities to challenge assumptions.
Engage someone from outside your function, division, company or
industry to help you test your thinking. Every business operates under
08
a number of assumptions. Exposing and reversing the assumptions
within your business can be a great way to trigger fresh thinking and
new ideas.
Inject new thinking into the business regularly. Incorporate innovation
as a regular agenda item at meetings and use the time to have people
share their ideas for how to do things differently or better.
Initiate visits to best practice companies in other industries to see how
they address production issues or what they've done successfully to
improve sales. Herman Miller, a US-based furniture design company,
developed its award-winning Aeron chair by looking at the ergonomics
of how astronauts move in space.
Encourage those who attend conferences or courses to share their
learning with colleagues and team members so that everyone benefits.
To truly be open to innovation, leaders need to be willing to give up
some control and trust and enable those they work with to make
decisions and act with some authority. The role of a leader is not to
have all of the answers - it is to develop and enable others to perform at
their highest level. The more leaders encourage others to ask
questions, challenge assumptions and contribute their ideas, the more
there will be benefits of innovative thinking.
Some people are more inclined by nature to push themselves out of
their comfort zone. Leaders that do this - for example, by taking on
cross-functional roles, moving to new industries, or pursuing nontraditional career paths - can create highly challenging experiences for
themselves that, in turn, lead to significant new learning, new thinking
and change.
What can organizations do?
Give leaders the opportunity to learn from what doesn't work as well as
from what does. People make mistakes. How leaders recover and
learn from negative consequences is what determines their
effectiveness, and enables them to grow. Don't penalize people for
their perceived failures so that the can become opportunities from
which people can learn.
Build innovation into the business culture. Create systems and
structures that support innovative thinking and approaches. Hire
people who think creatively and have a broad base of experience.
Incorporate objectives around innovation into individual and team
performance measures. Engage all employees in identifying new and
creative ways to improve processes, fulfil customer needs, distribute
products and so on. Showcase examples of innovative thinking.
Recognize and reward innovation.
Master processes for driving change. The better a business gets at
implementing new processes, new structures or other new ways of
working, the less the idea of managing change will deter the
implementation of new ideas.
Be willing to invest in the longer term. Businesses that focus
exclusively on managing the short-term results hinder their own
abilities to remain competitive. Leaders need to be measured over a
long enough time span to enable new ways of doing things to take hold
and see their benefits realized.
Introduce innovative thinking tools such as brainstorming sessions
throughout the organization. Get people comfortable with a broad
range of such tools through training and participation in facilitated
sessions. Incorporate tools to stimulate innovation in strategic
planning, problem-solving sessions, strategic account planning and
other operational processes. When innovation is encouraged and its
perceived risks are minimized, who knows what great ideas will
emerge.
Heather Bordo is an executive coach, consultant and strategist
based in Toronto.
© Globecareers@globeandmail.ca, in The Globe and Mail.
TAX ASSESSMENTS: CHALLENGES
OF JUDICIAL REVIEW
Rosalie Wakesho Ngugi
T
he number of litigations against the Kenya Revenue Authority
has significantly increased as more taxpayers become aware
of their.
Alarge number of the cases filed against theAuthority, challenging tax
assessments and seizures of uncustomed goods are
filed by way of Judicial Review. This is because the
law recognises that administrative excesses must be
checked through judicial intervention.
Administrative law relates to decisions of officers and
organs of Central Government or Public Authorities
which are enforceable in, or recognized by, the
Courts of Law and may affect the rights of the
individual and.
Today, public authorities widely determine the
enjoyment of fundamental values such as social
order, justice and personal freedom. Their decisions
affect a large number of people and when unlawful,
such decisions must be open to judicial scrutiny and
when necessary, judicial review.
Origin and History of Judicial Review
Judicial Review represents the Judiciary seizing the
constitutional responsibility of curbing the excesses of executive
power. The statutory Orders of Mandamus, Prohibition and Certiorari
are remedies granted by the High Court to persons injured by the
exercise of administrative or judicial power. Their Origin lies in the
expansion of the Common Law in England and of the Court of the
King's Bench, to acquire supervision over the observation of the law
by officials.
Judicial Review developed from the ancient prerogative writs. All writs
were in the form of commands issued in the name of the Crown. For
this reason, Mandamus, Prohibition and
Certiorari are still often referred to as prerogative
writs though they are no longer granted in the
exercise of any prerogative but in pursuance of
statutory authority.
In Kenya, the orders issued in the name of the
republic, hence a Judicial Review Application will
be titled: Republic - Versus- Commissioner of
Value Added Tax exparte: Patel Shah
This means that Mr. Patel Shah who is the
Applicant seeks the permission of the Court to
apply for a Judicial Review of a decision made by
the Commissioner of Value Added Tax. The
Application for such leave is made "Ex- parte:
(without the other party)" and is made to a single
Judge, in Chambers (as opposed to in open
Court). The Republic is enjoined, as it is in the
name of the republic that the orders issue.
Nature of Orders granted under Judicial Review
There are three (3) orders granted under Judicial Review:
(a)Mandamus: The name is derived from the Latin word "Mandare"
09
meaning to "command". This order issues to compel a public official
who refuses to act in the manner prescribed by law. For example in
the case of Nairobi H.C. Misc. civil application no.792 of 2003:
republic - versus- Kenya revenue authority exparte: Moses
Bekabye, Mr. Bekabye was challenging the seizure of his motor
vehicle and the Authority's demand for customs warehouse rent. He
sought orders of Mandamus and Prohibition. The facts of the cases
are as follows. The motor vehicle, which was the subject of the
application, was seized on suspicion of being uncustomed on 21st
February 2002 from the premises of one Mohammed Farooq
Chaudry after he failed to produce documents relating to the motor
vehicle. At the time, the vehicle was supposed to be in transit to
Uganda. The said Mohammed Chaudry wrote to the Department of
Customs and Excise indicating that he was holding onto the subject
motor vehicle as a collateral security for KShs.200,000.00 which he
had lent the applicant. Indeed the Commissioner received a letter
from the applicant confirming that the vehicle was being held as
collateral.
The Customs and Excise Department required that the applicant
appear before a Proper Officer to record a statement in connection
with the said vehicle specifically for pledging as security goods, which
were subject to customs control without the authority of the
Department. The applicant did not show up.
The Court ruled that though the applicant had not violated the
requirement relating to the transit period, he had committed several
other offences under the Customs and Excise Act as indicated above
rendering the vehicle liable to forfeiture. The Court therefore
declined to grant the orders of Mandamus and Prohibition.
GOOD KARMA
(b) Prohibition: issued to prohibit the assumption of unlawful
Jurisdiction or excesses of Jurisdiction. Its function is to prohibit
encroachment into another Jurisdiction and to prevent the
implementation of orders, when there is a lack of Jurisdiction.
In most cases taxpayers will go to Court and seek orders of
Prohibition to prohibit the Commissioners from issuing Agency
Notices to their bankers.
(c) Certiorari: Is derived from the Latin word "Certiorari" which
means to be "Certified", "informed", "appraised" or "shown". The
order is addressed to inferior courts and require that the proceedings
of that Court to be transferred to a higher court and be examined for
validity.
In Nairobi H.c. Misc. civil application No.887 Of 1998 Republic versus- Commissioner of Value Added Tax exparte Atul Shah, the
Commissioner of Value Added Tax had raised two assessments one
of KShs. 684,954,231 dated 16th April, 1998 and another of KShs.
920,976,098 dated 17th April, 1998. The Applicants then moved to
Court and applied for orders of Certiorari to issue so that the said
demands from the Commissioner of Value Added Tax be quashed.
The Court in quashing the assessments took issue with the fact that
two different assessments had been issued calling into doubt the
accuracy of either of them.
CONCLUSION
The officers of the Authority must therefore understand that through
Judicial Review the taxpayer is armed with a powerful weapon to
challenge assessments and seizures carried out by them. For this
reason all the acts carried out by Revenue Officers must be guided by
the law carried out in good faith and have due regard for Natural
Justice.
T
7. When you realize you've made a mistake, take immediate steps
to correct it.
8. Spend some time alone every day.
9. Open arms to change, but don't let go of your values.
10.Remember that silence is sometimes the best answer.
11. Live a good, honorable life. Then when you get older and think
back, you'll be able to enjoy it a second time.
INSTRUCTIONS FOR LIFE
12. A loving atmosphere in your home is the foundation for your life.
1. Take into account that great love and great achievements 13. In disagreements with loved ones, deal only with the current
involve great risk..
situation. Don't bring up the past.
2. When you lose, don't lose the lesson..
14. Share your knowledge. It's a way to achieve immortality.
3. Follow the three R's:
15. Be gentle with the earth
Respect for self, Respect for other's and Responsibility for all your 16. Once a year, go someplace you've never been before.
actions.
17. Remember that the best relationship is one in which your love
4. Remember that not getting what you want is sometimes a
for each other exceeds your need for each other.
wonderful stroke of luck.
18. Judge your success by what you had to give up in order to get it.
5. Learn the rules so you know how to break them properly.
19.Approach love and cooking with reckless abandon.
6. Don't let a little dispute injure a great relationship
his is a nice reading, but short. Enjoy! This is what The Dalai
Lama has to say on the millennium. All it takes is a few
seconds to read and think over. Do not keep this message.
The mantra leave our hands within 96 hours. You will get a very
pleasant surprise. This is true for all - even if you are not
superstitious… or of whatever religious belief… Faith…
THE WEAKEST LINK IN SUPPLY CHAIN SECURITY:
A COMMON APPROACH IN THE REGION.
R
evenue authorities around the world operate in a constantly
evolving environment. The change is influenced by the impact
of information and communication technologies, proliferation of
regional trading agreements, private sector demands for just-in-time
inventory and the impact of increasing security concerns on our role as
facilitators of international trade.
Since the terrorist attacks in Nairobi and Dar-es-salaam on 7th August
1998, other than the loss of lives, the East African Community has
experienced negative growth in its economy especially in tourism, due
to threats of similar terrorists attacks and adverse travel advisories
issued against the region by the west. Further terrorist attacks were
subsequently carried out in the USA on September 11, 2001 and in
10
Mombasa in November 2002 to mention but a few places.
The need to take joint measures with other law enforcement agencies
to protect lives and the integrity of our borders has never been greater.
To this effect, the World Customs Organisation (WCO) has taken a
lead role in formulating global strategies on the changing role of
customs in the context of increasing security challenges.
In June 2002, The WCO Council adopted a Resolution on Security and
Facilitation of the International Trade Supply Chain 2. as a formal
response by the global community to the terrorist threat. This
resolution is based on the logic that a chain is as strong as its weakest
link, meaning that global security is indivisible. Partnerships between
developed and developing countries, the public and the private
sectors and between different government agencies have to be
established in a regime which will ensure unhindered movement of
legitimate goods and prevent entry of dangerous goods, persons or
conveyances.
The resolution acknowledged the need for assistance by developing
countries in order to increase security in their supply chains. This
entails beefing up security at border points, sea and air ports, use of
specialized equipment to conduct surveillance and scan goods as
they are imported or exported, enhancement of information
infrastructure and application of appropriate modern technology. So
far, five meetings have been held at the WCO headquarters in
Brussels.
An Action plan on Supply Chain Security and Trade Facilitation
Advanced Cargo Information Guidelines (ACI) and A new Mutual
Administrative Assistance Convention (MAA) were produced to
provide a framework for international cooperation in this matter.
The role of customs thus been transformed.
In the USA, the Customs department now works very closely with the
Department of Homeland Security. The US instituted measures which
included the requirement of scanning goods meant for shipment to
their market. Their trading partners had to sign agreements for close
monitoring of cargo to that country.
In a similar move, Canada customs formed a new department called
Canada Border Service Agency -CBSA whose additional mandate
includes immigration intelligence and functions previously performed
by the Canada Food InspectionAgency.
The Eastern African Region has been plagued with human conflict and
the proliferation of small arms and light weapons. This has made the
region vulnerable to terrorist attacks.
What is expected of our administration?
International Supply Chain Security Standards require customs to
transform itself into the lead border management agency by virtue of
expertise and strategic position. The New Resolution on Supply Chain
Security and Trade Facilitation 3 which was adopted in June 2004 by
the WCO council as well as numerous United Nations Security Council
Resolutions on Somalia require a strengthening of customs border
controls.
KRA-Customs Capacity building needs, as highlighted in a meeting
with UN Monitoring Group on Somalia panel of experts (June 2004),
included identification of small arms and light weapons,
communication equipment , patrol vehicles and renovation of border
facilities. These have since been incorporated in the panel's report to
the UN Security Council.
Secondly, Customs administers the US African growth and
Opportunity Act (AGOA) provisions on preferential exportation of
qualifying goods to the US market. The regional economies have
benefitted from this opportunity. This unilateral preferential trade
agreement hinges on the adherence to the supply chain security
conditions.
KUTOA NI MOYO
B
right faces full of hope so were the faces of the 42 children
of St. Nicholas Children's Home in Karen who greeted a
KRA team on 29th October 2004.
The team, led by Acting Deputy Commissioner Corporate & Public
Affairs Division Ms. Fatma Yusuf, visited the children's home,
which is in dire need of numerous ; An outstanding electricity bill of
Kshs 14,833.40, fuel for their 25 seater mini bus donated by the
Church of Apostles -Episcopal of Virginia USA.
The children recited poems and sang songs in recognition of all
those who support the home, and the HIV/AIDS pandemic. A
poem, by the youngest of the children, about AIDS reminded us
that the HIV virus, as tiny as it is, has devastating effects and has
continued to sweep across the Africa like a bush fire, decimating
people regardless of status. With AIDS all human beings are
equal, the tiny tots told us.
Corporate and Public Affairs staff led by Ms. Fatma Yusuf
KRA gave a donation of Kshs 50,000 for use in settling the presenting the donnation to St. Nicholas Children’s home, Karen.
outstanding electricity bill and other priorities for the school.
11
HON. DAVID MWIRARIA ADDRESSES DISTINGUISHED TAXPAYERS
Honourable Ministers, Chairman of the KRA Board of Directors, Mr.
Lenny, Mwangola, Commissioner General, KRA, Mr. Michael Waweru,
Members of, the Diplomatic Corp, Distinguished Guests, Ladies and
Gentlemen.
It gives me pleasure to participate in this special occasion to mark taxpayers
week and also to recognize our distinguished taxpayers. As has become
increasingly clear, tax collection is key to the attainment of sustainable
economic growth while preserving independence of our country. However, this
is only possible when we all adapt to a culture of paying taxes.
Some people do raise the question: why pay taxes? The answer to this question
is that, until someone comes up with a better idea, taxation is so far, the only
practical means of raising the revenue to finance government operations and
payment for public goods and services, which its citizens demand and which
cannot be easily provided by the private sector. Tax revenue is therefore an
important instrument for promoting development. It is in this context that we
are here today, to mark the national taxpayers' week by recognizing some of the
taxpayers for their invaluable contribution towards the achievement of our
shared development objectives.
Ladies and Gentlemen, the formation, in 1995, of the Kenya Revenue
Authority (KRA), as an autonomous body was based on realization that to
mobilize adequate resources, the country needs an efficient tax administration
system. Since 1995 tax revenues have grown at an average rate of 10%
annually, an excellent performance during the period. I am happy to say that
this success was largely attributed to our dedicated taxpayers together with
increased professionalism of the KRA staff.
Over this period, revenue collections increased from Kshs 122 billion in
1995/96, fiscal year, to Kshs 229.3 billion in the 2003/04 fiscal year. I am
pleased to note the considerable growth in revenue since the NARC
Government took power in January 2003. For instance, during the last
financial year 2003/04, KRA collected a total of Kshs. 229.3 billion against
a target of Kshs. 220.8 billion, thus registering a revenue surplus of Kshs. 8.5
billion. In terms of growth this was 13.7% over the fiscal year 2002/03.
Ladies and Gentlemen, While these achievements in revenue are
commendable, the current situation demands enhance efficiency for the
customs regime to facilitate cross border trade and to promote investment.
This is necessary because Kenya has a regional challenge brought about by
serious political and social problems occasioned by failed states that surround
our country. This situation has made the Customs function a very difficult one.
While the KRA has made efforts to overcome these challenges, the problems
remain. As will be appreciated, the administrative and regulatory
infrastructure in key regions of some neighbouring countries is either poor or
non-existent. Thus there are no partners to supplement KRA's services, yet we
cannot ignore these areas or the problems the people who live there face.
Secondly, as our neighbours recover, KRA will need to play a critical role to
facilitate trade and economic services in and out of these countries. This they
must do while protecting Kenyan industries from dumping of untaxed goods
and other prohibited items.
Furthermore, with the expected economic recovery in Sudan, the Great Lakes,
and Somalia, culminating in a start to rebuild their economic and physical
infrastructure, KRA will be expected to enhance cross-border surveillance
without hindering flow of goods. In addition, the Authority may be called upon
to provide training to its counterparts in those countries. It is therefore in our
best interest to prepare so that we help these states to stabilize and build their
revenue authorities, especially the Customs.
The benefits of such investments will impact positively on the whole region. On
the home front, Ladies and Gentlemen, we expect KRA to continue with its
capacity building efforts in order to expand the revenue base. This is critical to
reducing the cost of doing business in Kenya, which we need to improve our
competitiveness. Unfortunately, KRA must achieve these objectives while
responding, sufficiently to problems posed by both globalisation and advances
in communication technology.
As regards utilization of tax revenues, the Government is continuing to
implement reforms in the management of finances to improve accountability
and increase value for tax money. For instance, we have institutionalised the
annual Public Expenditure Reviews, (PERs), to ensure there is enhanced
relationship between expenditure and outcomes. We have also adopted the
Integrated Financial Management Information System (IFMIS), which aims to
in particular ensure public resources are better utilized. This we believe is
critical to improving accountability and match resource allocation to
utilization. This system is designed to ensure that at any one time, finance
managers can monitor resource flows and spending at the same time. This
approach is based on the appreciation that to achieve the goals we have set,
we need to manage both the revenue and expenditure prudently.
Ladies and Gentlemen, we as individual and collectively have a duty and
responsibility to drive this country to economic prosperity. As taxpayers, a few
of us have demonstrated this spirit by diligently paying their taxes on time and
honestly. I want to challenge those who have not done it to do so; otherwise we
cannot build this country unless we do so. Today, we wish to honour and thank
those who have demonstrated that it is possible to comply with our tax laws
and still succeed. To them I say "you have done us proud."
However, this occasion should also be seen as a challenge for those of you who
have performed well. Just like a fast runner who wins, unless you can sustain
and increase the pace, you face the risk of slowing down and being overtaken.
Thus, being a fast runner you set a pace for those who want to beat and
overtake you. Similarly, while KRA has done well, it cannot afford to be
complacent because unlike others, you have a critical role to service our
economy and those economies of our land locked neighbours. Following recent
developments in Sudan, Somalia and the Great Lakes, we expect substantial
increase in volume of transit cargo and the associated risks, such as diversion
of goods into the local market to increase too. Remember that every cargo
that is diverted is both a loss to revenue and adversely affects the local
producers. Consequently, your success in combating trade irregularities and
tax evasion is synonymous to promoting good taxpayers and improving the
domestic environment to investors. As a Government, we support various
initiatives KRA has taken to reform and modernise tax administration in this
country.
I am happy to note that as part of reforms to revenue improvement effort, KRA
has made very good progress. This includes; (a) reorganization of the Kenya
Revenue Authority to ensure it operates better and is focused on core
functions, and with greater integration; (b) developing its capacity to
facilitate economic activities and trade, without sacrificing the revenue
collection function; (c) improving capacity to provide cross-cutting services
for delivering them more effectively;(d) making Authority more responsive to
challenges of globalisation and regional integration, and (e) maximizing on
utilization of available resources, especially information technology.
For those taxpayers who are being recognised today, I wish to pay special
tribute to you, not only for paying taxes to the government, but more
importantly, for your role as creators of wealth and employment in the
economy. Indeed these are core objectives of our Economic Recovery Strategy
for Wealth and Employment Creation (ERSWEC). It therefore goes without
saying that the NARC Government commitment to poverty reduction and
employment creation can only be delivered by the private sector. The
Government will mainly play the facilitative role.
Ladies and Gentlemen, the concept of honouring distinguished taxpayers
comes with the recognition of businesses and individuals who engage in best
practices with regard to payment of taxes. For those recognised today, we take
you and front-runners and role models for others to emulate. The challenge
before you, therefore, is to make sure that you remain in that category. And for
those who wish to bring their taxes up to date, you have an opportunity to do
so through the tax amnesty, which is due to expire on 31st December 2004.
Before I conclude, let me take this opportunity to categorically state that
declaration of amnesty is the last chance to those who want to come clean with
regard to tax payments. Those who do not take the opportunity and instead
continue with their bad ways will only have themselves to blame. I want to
assure them that the reforms that we are taking in KRA will identify them and
bring them to the tax net. When that happens, they will face the full force of
the tax law.
Ladies and Gentlemen, let me congratulate the recipients of the various
awards for their contribution to wealth and creation of employment for this
country through tax compliance. You are our public finance heroes who
deserve respect. I also wish to recognize each and every taxpayer in Kenya.
These celebrations demonstrate our appreciation and resolve to strengthen
our country to become truly independent. Needless to say, a nation that
cannot pay for its obligations can never be free.
Finally, I wish to pay special tribute to the Board, management and staff of the
KRA for the good job they are doing for this country. Continue on that path.
Thank you for your attention.
12
KRA Recognises Distinguished
Kenya
My Land is
You've only got one mama
You've only got one pa
You've only got one life to
live
No matter who you are
You can go the whole world
over
Ever city has its dawn
But everybody living
Has one place where he
was born
(Chorus)
And mine is Kenya
So warm and wild and free
You will always stay with me
Here in my heart
My land is Kenya
Right from the high lands to
the sea
Here in my heart
Here in my heart
One could have heard a pin drop as
Caroline Nderitu recited My Land is Kenya
by Roger Whittaker in the backdrop of
the instrumental version of the song during
the Taxpayers' Luncheon on 21st October
2004.
You've only got one
childhood
And the memory, which
springs
When you see your house
The tree you climbed
And all those precious
things
The faces of the friends I've
had
The images of home
Oh! When I close my eyes
In the land I love
The land where I was
born…
Honoured top taxpayers displaying their awards
Chorus
My land is Kenya
Right from the high lands to
the sea
Here in my heart
Here in my heart
A delighted top taxpayer Mr. James Musyoki, MD,
KBL with Commissioner General Mr. M. G.Waweru
and Minister for finance Hon. David Mwiraria at a
light moment.
Highly adorned ushers ready to welcome
distinguished taxpayers
13
Tax Payers
Happy MD for KBL Mr. James Musyoki being
congratulated for his excellent performance.
Commissioner General Mr. M. G. Waweru and
Board Chairman Mr. Lenny Mwangola welcoming in
the Minister for Finance Hon. David Mwiraria.
Mr. Micheal Joseph, Group MD, Safaricom receiving
his trophy from the Minister for Finance Hon. David
Mwiraria.
George Muhoho, MD for Kenya Airports Authority
(left), James Musyoki, MD for KBL and KRA’s Board
Member, Nathaniel Kangethe having a “tet-a-tet”
The indomitable local music group that spiced the
distinguished top taxpayers occasion (Kayamba
Africa)
Minister for Finance Hon. David Mwiraria receiving
his distinguished trophy from Commissioner
General, Mr. M. G. Waweru
Commissioner for Customs and Excise, Mr. Francis
Thuranira reading a citation at the occasion. With
him is the Master of Ceremony Commissioner of
Support Services, Mr. Matemu Mumo.
14
Chairman Lauds Distinguished Taxpayers
M
inister for Finance, Hon. David Mwiraria,
Honourable Ministers, Your Excellencies,
Ambassadors and High Commissioners,
Members of the KRA Board of Directors,
Commissioner General of KRA Mr. M. G. Waweru,
Representatives from East African Revenue
Authorities, Distinguished Guests, LADIES AND
GENTLEMEN:
This is a special day in
the history of Kenya, and
Kenya Revenue
Authority in particular,
because we have been
celebrating the
anniversary of our
freedom from the
shackles of colonialism,
and today we have
gathered here to honour
compatriots who have
been in the frontline of
our struggle to free
ourselves from the yoke
of debt and dependence.
Only yesterday, we celebrated Kenyatta Day, in honour
of the heroes and heroines of Kenya's freedom
struggle. In line with the theme of the Taxpayers' Week,
KRA believes that To Pay our Taxes is to Set our
Country Free or in Kiswahili Kulipa Ushuru ni Kulinda
Uhuru. We want to break free from the past, rise to
greater heights of achievement, and together build a
strong nation that can proudly stand in the community
of nations.
From time immemorial, those collecting taxes have
been hated, and citizens have always criticised the use
to which such taxes have been applied. This hatred has
always led to a cat-and-mouse game between tax
agents and taxpayers, with agents perceiving
taxpayers as criminals unwilling to pay their taxes, and
taxpayers wary of government agencies highhandedness in collection of taxes. Since formation of
KRA in 1995, we have worked hard to change our
image, and position the organization as a partner in
Kenya's national development.
In our Corporate Plan for the years 2003/2004 to
2005/2006, we recognized the need to change our
work practices, to be more responsive to the needs of
our clients and deliver high quality services. This
occasion is intended to provide an opportunity for us to
interact freely with our clients for mutual understanding
so that what we can improve on our performance and
work on the challenges that face us.
Chief guest, ladies and gentlemen, KRA has given
greater attention to promoting integrity and fighting
corruption than has been the case in the past. We are
proud of the fact that Kenya became the first country in
the world to sign the International Anti-Corruption
Convention in December 2003. And KRA has fully
embraced the Public Sector Integrity Programme
(PSIP).
In addition, we are working closely with regional bodies
and international organizations like the World Customs
Organization (WCO) to formulate appropriate
strategies to improve integrity in our administration and
thereby reduce the cost of doing business for Kenyans.
We have also set out to improve our business
processes for prompt
service to our clients and
rationalized use of our
physical and human
resources. As a result of
these initiatives, KRA's
performance in the last
financial year has been
impressive, and the trend
continues as we move
forward in accordance to
our vision: to be the
leading revenue
authority in the world,
r e s p e c t e d f o r
professionalism, integrity
and fairness. We believe
that steadfast attention to
these core values will propel our country forward.
Chief guest, ladies and gentlemen, A popular
Kiswahili proverb says Mkono Mtupu Haurambwi. KRA
has therefore invited our clients and stakeholders for a
meal, and to enable us give tokens of appreciation in
honour of distinguished taxpayers. We recognise that
we cannot succeed on our own, without the support of
the distinguished men and women among us today. We
call upon you to help us to reach more Kenyans to
become part of this endeavour to achieve economic
freedom for our country.
We note that out of the 30 million Kenyans, only about 2
million pay their taxes. If more people come into the tax
net, the government would be able to lower the tax
rates, and there would be more disposable income for
our citizens. We know that there are many out of the net
because they are below the threshold; others are out
due to non-compliance.
In January this year, I was privileged to attend the
Taxpayers' Day in Rwanda. This concept is now
receiving the attention of revenue administrations in
the East African region. This is why we have amongst
us today representatives from Uganda Revenue
Authority and Tanzania Revenue Authority. We started
last year by holding a Taxpayers' Day, and we want to
make it an annual event, to honour the spirit of tax
compliance in Kenya, in the knowledge that it is our
taxes that run this country.
Chief guest, ladies and gentlemen, The Board of
Directors and Management of KRA appreciate the
resources the Ministry of Finance has committed for
the acquisition of container scanners at the port of
Mombasa.
The scanners go a long way in not only curbing revenue
leakage and improving the security regime, but also in
15
helping lift the status of our port to world-class. Some
of the reforms we are undertaking may bring some
inconvenience to our clients. We call for your patience
and understanding during this period. In the end, the
reforms will be for us all.
More recently during this year's Budget Speech, the
Minister for Finance committed more resources
towards the modernization of KRA. With the support of
the government, our clients in the private sector and
other stakeholders, our success is assured. Thank you
for being part of the realization of our vision to be the
leading revenue authority in the world, respected for
our professionalism, integrity and fairness, a vision
that draws deep from the aspirations of Kenyans for
excellence in all areas.
It is now my pleasure to welcome our Chief Guest, the
Minister for Finance, Hon. David Mwiraria to make his
speech, and thereafter present awards to
distinguished taxpayers.
Thank you.
Lenny M. Mwangola
Distinguished
Taxpayers 2004
OVERALL DISTINGUISHED TAXPAYERS
(i) 1st -Kenya Breweries Ltd
(ii) 2nd -Kobil Oil Kenya Ltd
(iii) 3rd -Safaricom Ltd
DEPARTMENTAL TOP DISTINGUISHED TAXPAYERS BY TAX HEAD
a) Income Tax
(i) Corporation Tax-Safaricom Ltd
(ii) Pay As You Earn (PAYE)-Teachers Service Commission
(iii) Withholding Income Tax-Barclays Bank of Kenya Ltd
(iv) Individual Tax-Joseph Michael Samuel
Group MD, Safaricom, Michael Joseph receiving his top award from
the Minister for Finance, Hon. David Mwiraria
b) Value Added Tax
(i) VAT Domestic-Mumias Sugar Company Ltd
(ii) Withholding VAT-Kenya Power & Lighting Company Ltd
(iii) Excise Duty on Airtime-Safaricom Ltd
(iv) Improvement/Growth in Revenue-West Kenya Sugar Co. Ltd
c) Customs & Excise
(i) Dry Cargo Importers-DT Dobie & Company Kenya Ltd
(ii) Wet Cargo Importers- Mobil Oil Kenya Ltd
(iii) Excise Duty-BAT Kenya Ltd
(iv) Improvement/Growth in Revenue-Louis Dreyfus Kenya Ltd
(v) Top Bonded Warehouses
Regional Entrepreneurs
(vi) Anti-Counterfeit
United States Agency for International Development
(USAID)
(vii)Facilitators
Kenya Ports Authority Ltd
Kenya International Freight & Warehousing Agency (KIFWA)
Kenya Airports Authority
d) Road Transport
(i) Motor Vehicle Registration- Toyota (East Africa) Ltd
(ii) Motor Vehicle Licensing-Anwar Ali & Bros
(iii) PSV- Road Safety Enforcement-Molo Lines Services
TOP REGIONAL TAXPAYERS
(i) Western Region-Equator Bottlers Ltd
(ii) Rift Valley Region-Kenya Tea Packers Ltd
(iii) Central Region-Bidco Oil Refineries Ltd
(iv) Northern Region-East African Portland Cement Ltd
(v) Southern Region-Kenya Petroleum Refineries Ltd
SPECIAL CATEGORY OF TAXPAYERS
(i) National Bank of Kenya Ltd
(ii) Kenya Bankers Association
(iii) Ministry of Finance
(iv) Ministry of Agriculture
(v) Ministry of Trade and Industry
(vi) Kenya Airways Ltd
Group MD, BIDCO Oil Ltd Vimal Shah receiving his award
16
COMMISSIONER GENERAL’S COMMENDATION
No. NAME OF THE COMPANY
1
2
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
Kenya Shell Limited
National Oil Corporation Of Kenya
Ltd
3 Caltex Oil (K) Limited
4 Total (K) Ltd
5 Standard Chartered Bank (K) Ltd
6 Kencell Communications Ltd
7 Mumias Sugar Company Ltd
8 Kenya Pipeline Company Ltd
9 Bamburi Cement Limited
10 General Motors East Africa Ltd
11 Mastermind Tobacco (K) Ltd
12 Treadsetters Tyres Ltd
13 Central Bank Of Kenya
14 Nation Media Group Limited
15 Kenya Airways Ltd
16 Bat Tobacco Kenya Ltd
17 Petro Oil Kenya Limited
18 Kenya Commercial Bank Ltd
19 Chemelil Sugar Company Ltd
20 Unilever Kenya Limited
Ministry Of Health
Citi Bank N A
James Finlay Kenya Limited
Dalbit Petroleum Ltd
Nairobi Bottlers
Kenya Petroleum Refineries
Corrugated Sheets Limited
Ministry Of Public Works And Housing
Triton Petroleum Company Limited
Pembe Flour Mills Ltd
Pwani Oil Products Ltd
Coca Cola Africa Ltd
UDV Kenya Ltd
Kenyatta National Hospital
Kenya Revenue Authority
Nzoia Sugar Company
National Security Intelligence Service
Hydery (P) Limited
Eveready Kenya Ltd
Nakuru County Council
Uchumi Supermarkets
Securicor Security Services
Cooperative Bank Of Kenya Limited
RAI Plywood (K) Ltd
Tetra Pak Limited
Farmers Choice Ltd
National Social Security Fund
NAS Airport Services Ltd
Communications Commission Of Kenya
Commercial Bank Of Africa Limited
Kenya Electricity Generating Co. Ltd
Simba Colt Motors Ltd
Mombasa Maize Millers Limited
Bata Shoe Company (Kenya) Limited
National Assembly
SDV Transami Kenya Limited
Menengai Oil Refineries Limited
PZ Cussons East Africa Limited
Alico (K) Ltd
Firestone East Africa (1969) Ltd.
Hot Point Appliances Ltd
Marshalls (EA) Ltd
By the Steering Committee of the Taxpayers’ Week - 2004 .
TAXED TO DEATH
Reflections on Revenue Issues from a Global Perspective
T
he only sure thing in life is death and taxes. Since death is
an issue better left to rest in peace, we'll talk about tax
people or the gardai (customs) and them Revenoo fellers
as Brendan O'Connor calls them in a recent article in Ireland's
Sunday Independent.
Far too many people than I care to mention genuinely hate tax
people, everywhere. Indeed, one of the first lessons they taught us
at the KRA Training Institute was that having chosen the tax
profession, the second oldest in the world, we had consigned
ourselves to a life of continuous hatred by all. In Canada, they
keep harping about the fact that the Income Tax Act was
introduced in 1917 as a (temporary) means of financing the 1st
World War (1914 - 1918). It has stayed to date, and there's no
chance that it will soon be abolished as has happened to the
death penalty in many countries.
Closer home, we hear there are plans to abolish the Graduated
Personal Tax in Uganda. When I was growing up in rural Kenya in
the '70's, news that the headman and his men were on the way to
check on who hasn't paid the kodi spread quickly like a bushfire,
and all grown up men would quickly disappear into the bushes. On
arrival of the entourage, the women-in-charge would plead for
mercy on behalf of their hiding men-folk, but the headman would
rarely budge. If there was no proof of payment, they would take
away chicken and other livestock as kodi. Of course, the loot
would be divided among the gang later in the day. Taxation is
legal; illegal extortion sometimes exists side-by-side, to the
detriment of the government and the tax agency. Kenya sent GPT
to the gallows in the '70's, good riddance. There are better ways
of collecting taxes.
What are taxes used for? Citizens naturally expect tax increases
in wartime. In times of peace, taxes finance different aspects of
government expenditure. While KRA has no control over
government expenditure, prudent expenditure encourages
compliance to the tax laws and the opposite is true. In every
country, you will find voices opposing this or other tax for various
reasons. A few years ago, there was a movement in Canada that
actively encouraged citizens not to pay taxes presumably because
payment of taxes is a violation of Canada's Charter of Rights and
Freedoms. The movement naturally dissipated following different
carrot-and-stick interventions. It would be easier if more people
listed to the words of Jesus Christ: Give unto Caesar…
Does our tax system stifle investment? The UN Centre for Trade
and Development, the UN Economic Commission for Africa, the
World Economic Forum and other international organizations
have tried to measure the competitiveness of different economies
in the world from the perspective of investment climate. The tax
regime is only one factor with an impact on the investment
climate, and it is not the most important.
Across different economies in the developed and developing world,
the main factors have been identified as a government that
respects the rule of law, adequate and working physical and
financial infrastructure, and sound institutions. Of course, an
unpredictable taxation regime, poorly enforced by corrupt tax
officials is a disincentive to investment. This is why we every day
need to remind ourselves our vision: to be the leading revenue
authority in the world, respected for professionalism, integrity
and fairness.
17
nwoD rednU
Greetings all. Hope you've
been keeping well. It's
time for me to share my
thoughts again. The
Dalai Lama said that
"take into account that
great love and great
achievements involve
great risk…" May I just
add that the former has
landed me in a lot of
trouble? I watch too many
movies and have probably
been reading all the wrong
books because that department isn't thriving like it should.
Anyway before I go overboard and toboa all my siri's, today I want
to discuss the latter.
I recently came back from studies abroad and bwana!… It's good
to be home. Being away made my patriotism shoot up to dizzying
heights. If one really wants to know how I feel about Kenya they
would have to use a Richter scale. My patriotism is of earthquake
proportions. Would you believe that I was tempted to get a
tattoo of the Kenyan flag on my arm? I even wanted to wear
hangis (traditional beaded earrings) just to announce to the
world that I am Kenyan. But then I thought about the excruciating
pain and I decided that there are other less painful ways to
express my patriotism.
Being away from home gave me so much perspective and insight
that I would have otherwise been oblivious to had I been home all
along. If you have an opportunity to do so take advantage. It is a
life changing experience.
Perth, Western Australia, is a beautiful state. It also happens to
be one of the cheapest cities in Australia; so if you ever go 'down
under', pass by and enjoy the sights. I advice you to watch a few
episodes of Neighbours or Home and Away' before you go
though, just to get used to the accent.
Prepare yourself for some horrid summers because temperatures
range from 340C-400C and in winter they go as low as 20C
although it doesn't snow. The average Australians I met found it
rather hard to believe that African's were not used to such high
temperatures. Majority of the ones I interacted with believe firstly,
that Africa is an entire country of which 99% is desert with South
Africa being the capital.
Some of them also believe that we roam wild and free with the
wildlife, you know, like in The god's must be crazy! They also
believe we live on trees and wear loin clothes! One lady asked me
where I was from and I told her Kenya. She nodded confidently like
she had been in Kenya only to say innocently "your father must be
the King of Kenya to be able to send you to Australia to study". I
was in utter shock when I realised she seriously believed my father
was a King. She was ecstatic having met African royalty. I wasn't
about to burst the poor lady's bubble. From that day henceforth
I became Princess Nimu. Man! Didn't I bask in the glory!
It is amazing how we take so many things for granted. We know so
much about other parts of the world, yet some of the people living
in those countries are unbelievably ignorant about Africa. One
Aussie stopped one of my friends on the streets and asked him how
he managed to get to Australia all the way from Africa. My friend
had heard enough of such questions and told him how he swam
from Mombasa to South Africa to catch a plane and how he
discarded his Leopard skin in Johannesburg. Unbelievable? Yes
but the man believed it! May I also add that my brother is a hero
to some of the Aussie's I met. Several of them wanted to know
whether he had killed a lion and I answered in the affirmative. A
true Moran at the tender age of 14!
After being there for two weeks, I thanked God for the 8-4-4
education system. I learnt so much about countries around the
world. This explains why Kenyans the world over excel in academia
when they join elementary, secondary or tertiary institutions. The
8-4-4 system exposes Kenyan children to so much! Like knowing
that not every Colombian is a drug dealer. This was however the
case with many of the Aussies who met my house -mate EstellaMaria from South America. Many wanted to know whether she
was in the 'family business' the same way they thought that every
African man is a Moran, having probably seen a few television
documentaries on the Maasai community.
Australia is home to the Aborigine community. They are wonderful
people with strong features, a dark skin and silky fine hair. They
are very aggressive and hard working people. Some of them were
quite mesmerised by our dark skin as
we travelled in trains to and from
college and would come very near
us and sometimes stare. Sometimes
we would get scared because we were
not sure of their intentions. Quite
often we burst into song in the train, at
the top of our voices in our
mother tongue and that would
drive them off. The 'Abo's' who
dared come close to us thought
we were mental cases.
18
DON'T BE SORRY!
TRAVEL ADVISORY
John Kipkosgei
This is a continuation of the last issue's travel review, today we tell
you what you need to travel to; South Africa, United Kingdom and
the United States.
South Africa
Passport valid for no less than 30 days after the end of the intended
stay
Visa application form duly filled in black ink
Proof of airline ticket booking
Two recent passport-size photographs
An invitation letter
Proof of sufficient funds
Letter from employer
Supporting documentation confirming purpose of the visit
Yellow fever certificate
United Kingdom (UK)
Valid passport with at least 6 months validity remaining
Visa application form duly filled
Invitation letter from organizations or person to be visited
Two recent passport-size photos
Letter from employer
Bank statement for the last six months (private visit)
Proof of accommodation in the UK and funding of the trip
Proof of onward destination
Applicable visa fee
Applicants travelling privately for the first time MUST appear
physically at the Embassy
United States
Original documents showing one's economic, financial, social and
family status
Valid passport (must be at least valid for six months from the
intended date of return from the US)
Visa application form duly filled
Full frontal passport sized photograph ("2 X 2") with light coloured
and plain. Profile photos not accepted.
Invitation letters or faxes
Letter from employer stating position, salary and authorization for
leave
Original Bank statements for the past twelve months (private)
Proof of legal status of family members (Private)
Applicable visa fee in US$ or equivalent in shillings
Applicants MUST appear physically
In the next issue, we tackle the most visited countries.
A ROSE BY
ANY OTHER NAME?
Maximilla Onyango
T
hough a rose by any other name would smell as sweet,
it wouldn't do to call "a rose" a "rise" and expect
others to identify.
The easiest way to show your appreciation to people is
identifying and amplifying their names. A person's name is
the difference between a stranger and a friend, the
difference between "that jamaa" and 'Mr. so and so".
Names are taken for granted, thus become easy to forget.
It is possible you would not approach someone whose
name you have forgotten easily and you would feel
humiliated if you forgot the name in ten seconds. One
forgets names within seconds of their introduction, leading
to embarrassment. As a result you may miss out on a
valuable contact.
The big question is, why do we forget names? If you
discover this problem you will become more attune of what
stands in the way of your making enriching connections
with new people.
"Your name is so difficult I can not pronounce it'. It is too
long! It is complicated! Is the usual phrases people use
whenever I offer my name.
Attitude!! Change your attitude towards things perceived
to be difficult. Ask the person to repeat it and even go a
step ahead and ask for the spelling. Be interested. Ask
about the origin and even the context - the person will be
immensely pleased for your interest in his or her person.
It shows that you care about them and it makes them feel
valued. The longer a name is, or the more complicated it is,
the better it is to inquire about it. Referring to someone by
name initiates a rapport that enhances communication.
Focus!! Most people worry about the first impressions and
the firm handshake and in the process lose on the
introduction thinking about themselves and focusing only
on themselves. Be attentive at the introduction stage and
repeat the name to yourself in four seconds, this will make
the first impression memorable.
The assumption that someone will automatically tell you
his or her name is misleading. Be the first to ask, go out of
your way to ask for someone's name or take him or her
aside and ask them to introduce themselves. This will help
you concentrate on his or her face and assign a name to it,
and block out other noises and distractions.
Practice! Practice! Practice! Use the best way that suits
your personality. Combine visual, aural or dramatic
techniques to remember names.
TIPS FOR TAXPAYER
EDUCATION MANAGERS
Daniel G. Wachira
Initiate your own programme.
Liaise with your Head office and Regional Managers for funds
facilitation and other necessary logistics.
Identify your target group properly by for example giving priority to:
> Newly recruited taxpayers. They need early induction into the tax
system.
> High revenue risk areas.
> NIL, credit and non filers. You need to understand why they are in
that status.
> Continuous taxpayer education particularly after legislative
changes.
> Requests from stakeholders.
> Choose your seminars/meetings venues properly and aim at
taking services closer to your taxpayers. However remember to
identify those venues that will portray KRA Corporate image.
> Publicise your seminars well by employing all channels of
communication at your disposal.
1 Involve your local Provincial Administration, trade Associations
and other relevant persons. This is the only way to make them feel
part of you and give the necessary support you may require.
Identify and use the most appropriate medium of communication
depending on the audience. You may require to use more than one
language as the ultimate goal is to make your audience
understand your message.
2 Encourage full participation by taxpayers by allocating more time
for questions and answers. Most taxpayers want to be heard and
their problems addressed on the spot.
3 Plan to hold your seminars when majority of your taxpayers are
free to attend. Avoid periods like:
M Busy days or hours
M Religious days or hours
M Tax due dates
M Days when there are other functions in the same venue as the
19
attendants for both might be the same.
4 Keep your seminars short as at the bottom line, taxpayers are
more interested in making that extra shilling. Remember that their
core business is trading but not learning how to be good
taxpayers.
5 Report to your head office, all your taxpayer education activities.
This will enrich your appraisal rating besides assisting you to plan
your future taxpayer education.
6 In order to have an effective Taxpayer Education Programme, you
need to identify responsible senior and experienced officers to
drive the programme. Non-performers and inexperienced will let
you down.
Mr. D. G. Wachira (left) and Mr. F. Muiruri at a taxpayers’ seminar.
E - LEARNING:
THE BEST WAY TO LEARN BY FAR?
Annastaciah Githubah and Kananu Muriuki
K
RA needs to consider alternative approaches to training
and learning, to promote professionalism and
motivation of staff as we seek to become a learning
organiz ation. Traditional formal training is expensive, and it is
limited to delivery of training programmes to a single group at one
time. Coaching and mentoring embeds learning as a permanent
presence in the life of an organization, where staff learn from one
another and from their own experiences. E-learning therefore
pushes the possibilities further, as standardized training can be
offered to different groups of individuals, located in different
places, in a cost-effective manner.
E-learning is a method of delivering training where various
courses and topics are organised and accessed electronically,
using a computer. Training can be conducted in a classroom, at
your desk, through a consultant, or acquired through experience.
E-learning is transmitted through Compact Disks (CD's), the
Iinternet and the intranet. The trainee is provided with scenarios
and simulations to make the lessons more interesting,
comprehensive and relevant.
The Commissioner General, Mr. M. G. Waweru, visited the World
Customs Organization E-Learning Centre during the WCO
Council Sessions in June this year, and was fascinated by the
programme that has, within one year of operation, registered
learners from over 90 countries from among the WCO's 164
member administrations.
WCO National E-Learning Coordinator, Mr. C. Buyonge is now
working with a multidisciplinary, interdepartmental team to
implement the programme in Kenya.
The team comprises Mrs. Ebby Khaguli, Ms. Lilian Kubebea and
20
Ms. Kananu Muriuki (all of Customs and Excise Department),
Ms. Annastaciah Githubah (MIS), Daniel Wambua (Human
Resources) and Eutycus Kariuki (Research & Corporate
Planning). Each member brings valuable insight, knowledge and
expertise to the team for the benefit of the organization, and the
team remains open to participation by others from within KRA,
the region and the world at large.
The team invited Mr. Ray McDonagh, the WCO Deputy Director,
Compliance and Facilitation Directorate, to share his ideas on the
strategic direction of WCO's capacity building programmes.
In October this year, the WCO Deputy Secretary General Mr.
Kunio Mikuriya, in his remarks during the inauguration of the Asia
Pacific Regional Office for Capacity Building (ROCB) in
Thailand, said that the WCO e-learning package would be hosted
at the WCO Regional Training Centres in Asia and Africa,
including the KRA Training Institute in Mombasa. This is part of
the WCO's regional approach to capacity building for more
relevant, efficient and effective delivery of programmes.
Twenty (20) learners have already been registered for WCO e-
learning, and some of the identified drawbacks to the timely
implementation of the programme include inadequate ICT
infrastructure and readiness among a number of the learners
and a low computer-to-staff ratio.
South Africa's experience in implementing e-learning for the
15,000 customs officers across the country, and lessons from elearning implementation in the Central Bank of Kenya have been
taken into account in formulating the KRA approach to elearning.
E-learning has many benefits, including enabling the learner to
access the course content conveniently, and to print relevant
reference materials when required.
The Customs and Excise Department, like other departments in
developing revenue administrations, has diverse training
requirements; these incorporate discipline expertise, additional
knowledge for short and long-term skills, social and networking
skills, project management and leadership skills, all which may
be addressed through e- learning.
Additional Reporting by Members of the WCO E-Learning Team
TAXATION OF INTERNATIONAL TRANSACTION
MALAYSIA AUGUST 2004
Maurice O. Ochieng’
The Malaysian Tax Academy, the training arm of the
Inland Revenue Board of Malaysia (IRBM)
conducted the 8th Workshop on Taxation of
International Transactions (TOIT 2004) in
collaboration with the Commonwealth Association
of Tax Administrators (CATA) from 2nd to 20th
August 2004. This programme commenced in
1997 and has consistently attracted participants
from the Commonwealth member countries.
This year, the workshop attracted 25 participants
drawn from 13 different countries (Barbados,
Brunei-Darussalam, Cyprus, Hong Kong, Kenya,
Malaysia, Mauritius, Namibia, Nigeria, Singapore,
Solomon Islands, Sri Lanka, Swaziland, Tanzania
and Uganda).
Kenya was represented by Maurice Ochieng', Ag
Deputy Commissioner, Head Office - DTD and Mr.
George Mbatai, Assistant Commissioner, LTO DTD from Kenya Revenue Authority.
The workshop focused mainly on International Tax
Issues affecting income taxation such as auditing of
cross border transactions involving Multi-national
corporations, the determination of Arms Length
Price in transfer pricing cases, the relevance of
transfer pricing guidelines with the OECD Transfer
pricing guidelines as a benchmark; the role of
Double Tax Treaties in international trade and
facilitation of Foreign Direct Investment (FDI) and
passive investment, the relevance of Model Tax
Conventions such as the Organisation for Economic
Co-operation and Development (OECD) Model
Tax Convention or the United Nations (UN) Model
Tax Convention in negotiating Double Tax Treaties.
Course facilitators were from the Inland Revenue
Some participants of TOIT 2004: Kenya, Namibia, Malaysia & Tanzania at the
tower bridge on the 42nd floor of the 88 storey Petronas Twins Towers
in Kuala Lampuri, Malaysia.
Board of Malaysia, CATA secretariat in London, Australia Tax Office, UK Inland
Revenue and Inland Revenue of India.
The Malaysia Tax Academy is located in Bandar Baru Bangi, Selangor, about half an
hour drive from Kuala Lumpur, the garden city of lights as it is fondly called.
Kuala Lumpur acquired city status in 1972 and was declared a federal territory in
1974. The capital is 243 sq. km and boasts of being home for the world's tallest office
building - the Petronas Twin Towers ( each tower has 88 floors with a tower bridge
connecting them at 42nd floor).
Malaysia is reknown for hosting major international events such as the 1998
Commonwealth Games, The CATA Annual Technical Conference in 2003 where Mr. M.
G Waweru, CG - KRA was elected President of the 47 member Tax Association and of
course the Motor Grand Prix Circuit.
The country is not content with being one of the most developed Asian nations.
Peninsula Malaysia's Vision 2020 programme is geared towards catapulting the
peninsula into the premier league of the First World countries.
21
NAVIGATING THE TRANSFORMATION WATERS
Creck Buyonge
Kenya Revenue Authority is going through a period of rapid
changes that will, perhaps for the first time in our history as an
organization, lead to genuine transformation of the authority as
an effective and efficient vehicle for enhanced revenue collection.
The words "reform" and "modernization" are now all too
frequently on the lips of members of staff, signalling the mood of
change that is pervading the whole organization (1). Change
comes with many challenges, including the possible obsolescence
of functions, redefinition of roles, and creation of new
responsibilities that may not have been foreseen from the
beginning. The resulting scenario can be explained by, and given
direction using, chaos theory.
Chaos theory is attributed to meteorologist Edward Lorenz, who
was wont to say that the flapping of a butterfly's wings in the
Amazon can cause a hurricane thousands of kilometres away. In a
recent article in the Montreal Gazette (2), Carole Kanchie
provides a number of tips on how we can use chaos theory to
prepare for changes that may occur in our careers. In this regard,
she advises that we need to guide our own careers by looking for
opportunities, and making small changes work to the advantage
of our organizations.
CRAZY CAREER SHIFTS
Instead of folding one's arms and waiting for doomsday, you can
transfer your competence from one job to another. For example,
such office support staff as copy typists, secretaries and
messengers will definitely see their duties change drastically with
increasing computer to staff ratios and as more technical staff
begin using computers for a variety of functions including typing,
receiving and sending mail. Crazy career shifts, such as moving
from medicine to accounting, customs to public relations are
often what we need to re-energize us and give a better direction to
our careers. However, one has to properly assess their
competencies, to avoid moving from the frying pan into the fire.
Organizations are defined by the fact that they are greater than
the individuals that make them up. Remember the main principle
of Gestalt psychology? "The whole is greater than the sum of its
parts". This speaks to me one truth: my personal career path and
ambitions must be in the service of the organization. If you try to
make the organization bend to your whims and fancy, you will soon
find yourself on the outside, looking in. After working for many
years in an organization, it's easy to begin thinking that somehow,
we have become so secure in the system that the organization has
to retain us come what may. As my high school teacher used to
remind us too often at school parade, none of us is indispensable.
I hate to think about it, but it's true. So I'd better say the truth
and shame the devil…
RESTRUCTURE YOURSELF
"It used to be that when people lost their jobs, the next step was to
find a similar job in another company," Sandy Vale says in an
article in the Financial Post (3), "But in the world of work in the
21st century, there is a new rule: Nothing is forever." What is the
way out? Restructure yourself, so that you remain useful and
needed by your profession.
Does your life's purpose fit in with the objectives of the
organization? It is important to work out a proper fit between our
personal goals, and those of the organization. Commissioner
General M. G. Waweru often refers to this factor as goal
congruence. An important question we need to ask ourselves is:
what is my definition of career development? Two generations
ago, it was normal to find employment in a government
department, and then hang in there until retirement, death, or the
dreaded sack. It's different now, as career development is
perceived as a life-long process. There's therefore no end to
learning - the more flexible employees are likely to fare better in a
time of rapid transformation.
"People need to understand themselves to allow things to become
clear so that we have a better perception of how to adapt and reposition ourselves to be able to go with the new flow. We need to
become confident with ourselves," says Dick Cappon, a business
and professional coach and president of Cappon Associates.
JOB ENRICHMENT
Organizational development experts have brought new thinking
on work, which defines employees in terms of their skills and
competences instead of the jobs that they (currently) do. This
means that instead of seeing myself as C.BUYONGE, WRITER, I
identify my knowledge and skills bank, which I deploy from time to
time depending on the task at hand.
However, an audit of one's skills and competences against the
strategic direction of the organization may reveal a skills deficit.
What to do? First, you could take advantage of any job
enrichment programmes within the organization. Let's clarify with
a personal example. As a Principal Public Relations Officer in the
Customs and Excise Department in the year 2003, I began
attending the weekly senior management revenue meetings
chaired by the Commissioner. This provided an opportunity to
understand the core business of the department from the top,
especially strategies on revenue enhancement. When the Assistant
Commissioner for Research & Corporate Planning was taking
their annual leave, I was assigned the responsibility of Secretary
to the meeting.
The knowledge that I was required to take up these responsibilities
for a month filled me with fear. I was always in my element doing
the public relations aspect of the business, and as my colleagues
in the Class of '96 will admit, I joined KRA from an interesting
background - theoretical linguistics - and I wasn't strong on
quantitative skills especially statistical manipulations.
Interestingly, the one month assignment ended with no deadlines
missed or evident incompetence, to my own surprise. Did I find the
job challenging? Yes. Boring? Definitely no. On the contrary, I was
thoroughly enriched by the experience.
A Better You
If you realize there are no opportunities for job enrichment, or
that the skills need formal validation, there are no shortcuts - go
back to class! Learning new skills and competencies in a formal
environment will be challenging regardless of age. You can now
restructure yourself to a better, more confident you, ready to
tackle the challenges of the future. "On my first assignment in
Post-Importation Audit," a friend from the Canada Border
Services Agency told me, "I was challenged by an experienced
auditor that my work was unprofessional. That's when I decided
to take up professional accounting."
A time of rapid transformation requires visionary and inspiring
22
leadership, not just good management skills. "Leaders who are
exceptional performers recognize the priorities in the long list of
things leaders are required to do. They make sure that each of
these critical factors receives the attention it deserves. They know
how to create cultures in which success is inevitable and people
embrace challenging goals with pride and ownership; they know
how to create teams that work like well-oiled machines and have
the energy and ability to achieve the exceptional; they know that it
is the day-to-day decisions, often little ones, that collectively will
determine whether their team can achieve better results faster;
they know how to ensure the quality of those decisions by
leveraging team knowledge, tapping their team's and their own
intuition, developing their team's innovative thinking and
changing decision-making meetings from the mundane into the
powerful activity they are meant to be; they know how to get the
help and resources to get things done." (4)
Notes
1. In the South Africa Revenue Service (SARS), they have given a
name to the process of transforming their organization,
siyakha, which means "we're building" in the Zulu language.
2. Kanchie, Carole (2004) "Make Chaos Theory Work for You",
Montreal Gazette, 8th September 2004, Ottawa: Ontario.
3. Vale, Sandy (2004), "Restructure Yourself", Financial Post,
22nd September 2004, Ottawa: Ontario.
4. Bendaly, Leslie (2004), Leadership on the Run: How to Get
Better Results Faster, Penguin Group Canada, Toronto:
Ontario.
TAXPAYER EDUCATION HIGHLIGHTS
Daniel G. Wachira
Kenya Revenue Authority Education Programme
recently carried out joint countrywide taxpayer
education seminars covering parts of central, Rift
Valley and Nyanza Provinces. The seminars took
place from 15th to 25th of June 2004 and were held in
Kerugoya,Nyeri, Nanyuki,Nyahururu, Naivasha,
Nakuru, Kisumu, and Bondo.
The co-ordinator of the excise, Mr. Daniel G Wachira,
worked closely with KRA regional managers in the
respective regions to ensure that all the necessary
requirements were in place.
During the seminars, Taxpayers were briefed on the
various changes contained in the budget, among them
the Tax Amnesty, which was received with a lot of
excitement. Taxpayers recalled that they had on many
occasions
appealed for an amnesty and were
therefore glad it had become a reality. Participants
promised to become compliant now that the burden
had been made lighter by the relief of additional taxes
and penalties upon full disclosure on unpaid taxes. Also
discussed was the newly introduced withholding VAT
system.
Income Tax, Road Transport and Customs & Excise
facilitators explained in detail the various legal
obligations required of their taxpayers e.g
requirements for PIN, submission of individual tax returns,
procedures for motor vehicle registration, and payment of
duty among others.
Through the exercise, KRA was able to reach 800 taxpayers.
They raised a total of 640 questions which were well
responded to by the facilitators. It is intended that these
questions be published in Frequently Asked Questions
booklets as well as posting on the KRA Website.
D.G. Wachira addressing taxpayers at a seminar
DO IT WHILE YOU CAN
Maximilla Onyango
The Kenya Association of Manufacturers have asked
KRA to extend the Tax Amnesty period. KAM indicated
their preference to having the Amnesty to cover a
complete financial year. In a seminar facilitated by KRA
and the Kenya Association of Manufacturers to discuss
issues affecting businesses, KRA urged businessmen
to take advantage of the Amnesty since it is a one time
opportunity.
The Amnesty, announced by the Minister for Finance in
his budget speech on June 10th , came into effect on
11th June and runs through to 31st December 2004. It
applies to all taxes including income tax, withholding
tax, VAT, duty and excise.
The Amnesty is an opportunity to companies and
individuals to pay previously undeclared taxes or duties
without penalties, fines or interest if the declaration is
made voluntarily.
KRA is carrying out awareness campaigns countrywide,
to enable equal opportunity for all to take advantage of the
Amnesty before expiring of the stipulated period.
While the manufacturers felt and urged KRA to request
the Ministry of Finance to use revenues collected above
the targets to clear outstanding VAT refunds, the Authority
confirmed that they were already working with the Ministry
of Finance on modalities to clear the outstanding refunds.
KRA agreed to consider the call to extend the Amnesty
period in consultation with the Ministry of Finance.
23
SOMALIA:
UN SECURITY COUNCIL'S BORDER WOES
Revenews Team
A report by the UN Monitoring Group on Somalia shows that
control of arms flows into and out of Somalia will be a daunting
challenge for the newly elected government of H. E. Abdullahi
YUSUF AHMED . Mr. Abdullahi was sworn in at a colourful
ceremony at Nairobi's Kasarani Stadium in mid-October, raising
the prospects for peace in the Horn of Africa following more than
a decade of continuous conflict and total government
breakdown.
Dr. John Tambi (a Transportation Expert, from Sierra Leone), Mr.
Melvin E. Holt (an Arms Expert, from the USA), Mr. Changsheng
Li (a Customs Expert, from China) and Mr. Joel Salek (a Finance
Expert, from Colombia) appointed by the UN Secretary General
pursuant to UN Security Council Resolution 1519 (2003),
presented their report in August in accordance with their
mandate.
"Somalia embodies pain and suffering," says the report in the
opening paragraph, "Plagued by 13 years of warfare, Somalia
has been hurting and bleeding - suffering from untold loss of life
and infrastructural and institutional degradation", adding that "It
is trapped in a complex cauldron originating in a complex web of
clan-based factionalism and compounded by occasional
interferences by selfish external interests."
Report S/2004/604, available to the public at the UN Security
Council web site, graphically chronicles various violations of the
arms embargo covering access to Somalia by land, air and sea,
in contravention of UN Security Council Resolution 733 (1992).
It notes that the Customs Department of the Kenya Revenue
Authority has become very aware of the current security
situation both internationally and regionally, and customs
officers are being trained to pay more attention to security and
border protection issues. However, the department has many
problems, such as lack of communication between
headquarters and field customs stations.
Amb. Bethuel A. Kiplagat, Kenya's Special Envoy for Somalia
and Chairman of the Intergovernmental Authority on
Development (IGAD) Facilitation Committee, early this year told
the monitoring group that reports indicating renewed flow of
arms into Somalia should be investigated. The group notes in
the report that shipments of small arms are regularly being
supplied to certain businessmen and other parties in
Mogadishu, Kismaayo and elsewhere in Somalia through
Kenya. The armaments are initially smuggled into Mombasa,
Kenya, by ocean freight or road transport by an organised group
of individuals consisting of Somalis, Kenyan nationals and
others before being transported to their destinations in Somalia.
The flow of arms into and within Somalia is facilitated by the
Bakaaraha arms market, a network of financially interlinked
arms markets located at different places in Somalia, the largest
single market being Irgogte. The other significant market is
Argentin. According to the report, arms trafficking is supported
by a series of legal and illegal activities ranging from currency
printing, transfer of money using the hawala system, the khat
trade, income from trade and contraband, drug trafficking, taxes
and levies, and kidnapping.
The report recommends capacity building support to customs
administrations in Kenya and the region to safeguard security. It
is feared that the arms flow to fundamentalist groups in the Horn
of Africa would jeopardize security in the region. The groups are
said to provide ongoing and military and terrorist training in
military tactics, kidnapping, the use of arms and explosives,
bomb making, communications and intelligence, and
psychological training. The UN Monitoring Group met with
senior Customs & Excise Department officers during their
investigations.
ZERO TOLERANCE TO CORRUPTION
Jeddy Ochuodho
Things have really changed. Oh yes! They have. This is a new KRA
with zero tolerance to corruption in line with the government's
pledge of a corruption free country.
KRA's track record has not been that good and all staff should
endeavour to improve our rating on the Transparency International
Kenya's list. It behoves all of us to try hard as the rating does not
mention names so we are all tarred with the same brush, which is
very unfair to the honest hard working members who are the
majority.
All members of staff are therefore advised to be extra vigilant in the
course of their duties so as not to be caught in compromising
situations. We know that some people treat the revenues due to KRA
as their own earnings. Others are simply careless and therefore end
up in dangerous situations not of their making.
With all the systems currently in place, chances of one stealing and
getting away with it are very slim. Loopholes have been so thoroughly
sealed that however hard one tries, chances of successfully getting
away with it are practically zilch!
Make sure you are conversant with your work and do not try to do
what you are not qualified or employed to do. Getting into trouble
while trying to help a friend or a relative is very easy.
The Public Service Integrity Sensitization Programme which all of us
went through was supposed to uplift our loyalty to the government
and keep us on the straight and the narrow. It is unfortunate that
despite all these initiatives we still have a few cases where staff are
alleged to be either extorting traders or stealing from KRA.
We should endeavour to lift KRA's banner high. "pamoja tuangamize
ufisadi"
24
The making of freedom
Caroline Nderitu
See how,
And we give to Caesar
When you have not renewed
What is Caesar's
your license
And to God
You are afraid of
What is God's?
approaching the police
We keep the rest
roadblock?
When we don't give
Then why not get do the
governmentright thing
We rob the government
And be free of fear or worry
Imagine
And you can drive
But we here have done our
anywhere
homework
Any time
We have done the right thing
You are free!
We gave Kenya her share?
We were fair?
See how,
We dared to give a care!
When the kids have not done
homework
We all dine at the glorious
They are afraid of the
table
teacher
That Kenya has laid out before
Then why not do the
us
When we feed Kenya well
homework
And enjoy being worry-free!
Kenya feeds us well
No Cat-and-mouse hideAnd we feed Kenya well
and-seek
And the ball rolls on smoothly
You are free!
We build Kenya
So that Kenya can build us
Just like the policemanTo build ourselves
Wants to see the road
And when we build ourselves
license
We build Kenya
Just like the teacherChristmas comes early this
Wants to see your
year
homework
KRA pats our shoulders
KRA says THANKS
So does KRA want to see
For KRA extends a bigger gift
your returns
Called amnesty
It's their job!
So while KRA is being nice
Be wise
The thing is
Cut Kenya her slice
The government allows us to
Or pay the dear price
make money
And when the money comes
Where there are questions
We Rudisha mkono
ariseAsk
Where answers bare needed
Give
And big words like
Detect, investigate and
prosecute
Will not scare you
Our taxes are the pillars
On which Kenya stands
You understand…
So let's lift Kenya higher
So before the government
comes to see you
Go and see the government
It'll take just a moment
Even if an injection may hurt,
It is the start to the cure, for
sure
Giving is harder than receiving
Yet it is in giving
That we receive
We receive freedom
Paying taxes
Gives us freedom
Kwa hakika
Kulipa ushuru
Nikulinda uhuru!
KRA Corporate and Public Affairs Division
Times Tower, 1st Floor, PO Box 48240, 00100, Nairobi. Tel: 310900. Fax 316872
Email: cic@kra.go.ke. Website: www.revenue.go.ke

revenews - Kenya Revenue Authority

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