UNDP and KRA Join Forces to Enhance Tax Management Efficiency
By David Ombee
From September 11th to 13th, 2024, the United Nations Development Programme (UNDP), partnered with the Kenya Revenue Authority (KRA), to host a three-day capacity building workshop on KRA employees, focused on improving tax management for High Net-Worth Individuals (HNWIs). This effort aims to boost government efficiency, increase domestic resource mobilization, and advance Kenya’s progress towards achieving the Sustainable Development Goals (SDGs) by improving the capacities of public institutions.
Tackling taxation challenges with HNWIs
HNWIs control a significant portion of Kenya’s wealth, yet their complex financial portfolios often pose challenges to tax compliance. The workshop provided KRA’s Premier Tax Office (PTO) staff with tools to better understand and manage this critical taxpayer group, aligning tax policies with national development goals, and improving institutional efficiency.
The workshop aimed to empower KRA officers with advanced skills and tools to better understand and manage this crucial taxpayer group, thus contributing to the SDG goal of building strong institutions (SDG 16). By equipping government bodies with the technical knowledge necessary to engage HNWIs, UNDP helps lay the groundwork for sustainable economic development, enhancing the efficiency of domestic resource mobilization and reducing dependency on external financing.
Leadership and strategic focus
Key KRA leaders, including Commissioner Mr. Alex Mwangi, KRA’s Commissioner for Strategy, Innovation & Risk Management, and Mr. Michael Mwaura, Chief Manager of the Premier Tax Office in Domestic Taxes attended the workshop, which was facilitated by UNDP’s Technical Expert, Dr. Lyla Latif. Their involvement reflects KRA’s commitment to not only improve its internal capacity but also to engage meaningfully with stakeholders to promote a culture of compliance and accountability.
This collaboration aligns with the recommendations of Kenya’s 2021 Development Finance Assessment, which emphasized the importance of improving tax compliance, enhancing organizational efficiency, and aligning tax policies with the SDGs. The workshop also aligns with SDG 17, which calls for partnerships to achieve development goals. By supporting KRA’s strategic goals, UNDP plays a crucial role in ensuring that Kenya’s public institutions are fit for purpose and ready to tackle future challenges.
This collaboration further aligns with Kenya Country Engagement Plan (CEP), which was signed and came into effect on 5th December 2023 that aims to align Kenya’s national priorities on financing for development with the Sustainable Development Goals (SDGs) and taxation.
The objectives of the CEP are to:
1. Increase KRA and relevant agencies’ capacity to tackle tax avoidance, tax evasion, and Illicit Financial Flows (IFFs).
2. Align tax and fiscal policy with Sustainable Development Goals (SDGs).
3. Incorporate Kenyan perspectives in regional and international tax discussions.
Key outcomes of the workshop
1. Advanced understanding of HNWI financial strategies
KRA staff gained insights into the financial strategies of HNWIs, improving their ability to encourage voluntary compliance and reduce tax evasion.
2. Improved capacity for profiling and analysis
KRA staff were trained on how to better analyze and profile HNWIs for tax purposes, equipping them with tools to assess risk more accurately and design targeted interventions that promote compliance.
3. Global and regional perspectives on wealth taxation
Participants explored different wealth taxation models from around the world, broadening their understanding of how such policies could be adapted for Kenya.
This comparative analysis will aid in developing more effective tax reforms in line with SDG 10, which focuses on reducing inequality, and SDG 8, which promotes inclusive and sustainable economic growth.
About the author
David Ombee is a Project Communications Officer at UNDP Kenya
