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Kenya Revenue Authority

Kenya Revenue Authority

The Kenya Revenue Authority (KRA) was established by an Act of Parliament on July 1st 1995 for the purpose of enhancing the mobilization of Government revenue, while providing effective tax administration and sustainability in revenue collection. KRA has its head offices at Time Tower, Haile Selassie Avenue, Nairobi.

In particular, the functions of KRA include: –

  • To assess, collect and account for all revenues in accordance with the written laws and the specified provisions of the written laws.
  • To advise on matters relating to the administration of, and collection of revenue under the written laws or the specified provisions of the written laws.
  • To perform such other functions in relation to revenue as the Minister may direct.

Role of KRA in the economy

  • To administer and to enforce written laws or specified provisions of written laws pertaining to assessment, collection and accounting for all revenues in accordance with these laws.
  • Advise on matters pertaining to the administration or and the collection of revenue underwritten laws.
  • Enhance efficiency and effectiveness of tax administration by eliminating Bureaucracy, Procurement, Promotion, Training and Discipline.
  • Eliminate tax evasion by simplifying and streamlining procedures and improving tax payer service and education thereby increasing the rate of compliance.
  • Promote professionalism and eradicate corruption amongst KRA employees by paying adequate salaries that enables the institution to attract and retain competent professionals of integrity and sound ethical morals.
  • Restore Economic Independence and Sovereign pride of Kenya by eventually eliminating the perennial budget deficits by creating organizational structures that maximize revenue collection.
  • Ensure protection of local Industries and facilitate economic growth through effective administration of tax laws relating to trade.
  • Ensure effective allocation of scarce resources in the economy by effectively enforcing tax policies thereby sending the desired incentives and shift signals throughout the country.
  • Facilitate distribution of income in socially acceptable ways by effectively enforcing tax laws affecting income in various ways.
  • Facilitate economic stability and moderate cyclic fluctuations in the economy by providing effective tax administration as an implementation instrument of the fiscal and stabilization policies.
  • Be a ‘watchdog’ for the Government agencies (such as Ministries of Health, Finance, etc) by controlling exit and entry points to the country to ensure that prohibited and illegal goods do not pass through Kenyan borders.

Legal framework

Ministry of Finance
The Ministry of Finance derives its mandate from the Constitution of Kenya, Cap VII Sections 99-103 which provides for proper budgetary and expenditure management of government financial resources. In addition, Parliament, over the years has enacted 49 Acts to which the Ministry of Finance is a custodian thereby adding more responsibilities to the Ministry.

Kenya Constitution 2010
The constitution of Kenya emphasizes that no tax or licensing fee may be imposed, waived or varied except as provided within its confines.

Business Institutions and Associations
There are a number of non-governmental membership organizations or associations that work closely with the government and international institutions to facilitate business contacts and ease transactions in Kenya. Given the position of these organizations they can influence tax policy and its implementation. These include: The Kenya National Chamber of Commerce and Industry; The Federation of Kenya Employers; The Fresh Produce Exporters Association of Kenya; The Kenya Flower Council; The Kenya International Freight and Warehousing Association; The Kenya Private Sector Alliance (KEPSA); and The Kenya Association of Manufacturers.