What happened

President William Ruto signed a law that introduces changes to the Kenya Revenue Authority (KRA) board, according to a report on Kenyans.co.ke. The legislation amends the statutory framework governing the board’s membership, appointment process, and term limits, with the stated aim of enhancing the agency’s efficiency and accountability. While the exact date of signing was not disclosed in the source, the announcement was made public in early September 2024, signalling the government’s intent to reform tax administration ahead of the upcoming fiscal year.

Context and background

KRA, established in 1995, is the principal body responsible for tax collection, customs, and revenue enforcement in Kenya. Its board historically comprised a mix of government appointees, private sector representatives, and senior officials from the Ministry of Finance. Over the years, concerns have been raised about politicised appointments, limited technical expertise, and delays in decision‑making that affect both revenue collection and taxpayer experience.

The new law seeks to address these concerns by redefining the criteria for board members. It introduces a merit‑based selection process overseen by an independent committee, reduces the number of political appointees, and sets a maximum two‑year term for each member, renewable once. The legislation also mandates quarterly performance reviews and obliges the board to publish an annual report detailing tax collection targets, compliance rates, and operational challenges.

Stakeholders, including the Federation of Kenya Employers and the Kenya Association of Manufacturers, welcomed the move but cautioned that implementation will be critical. Past reforms, such as the 2019 amendment that introduced the role of a Chief Executive Officer at KRA, showed mixed results: some improvements in digital tax filing were offset by lingering bureaucratic bottlenecks. The current amendment is therefore positioned as a continuation of the government’s broader fiscal reform agenda, which includes the rollout of the iTax platform and stricter enforcement of tax evasion penalties.

Compared with what is normal

Historically, KRA’s board composition has been heavily weighted toward political appointees, with the President and the Cabinet Secretary for Finance holding the primary authority to nominate members. The previous arrangement allowed for up to eight members, many of whom served indefinite terms pending reappointment. By contrast, the new law caps the board at six members, introduces clear term limits, and requires at least three members to possess professional qualifications in finance, law, or public administration.

• Earlier board structures often saw members serve beyond five years without formal performance assessments; the amendment now mandates a two‑year term with a possible one‑year extension.
• Political representation drops from a majority to a minority, ensuring that technical expertise drives decision‑making rather than partisan considerations.
• Mandatory quarterly performance reports replace the previous annual-only disclosure, providing SMEs and the public with more frequent insight into KRA’s operational health.

Why it matters

For Kenyan SMEs, the restructured KRA board could translate into faster processing of tax registrations, clearer guidance on compliance, and more predictable enforcement actions. A board that prioritises technical competence is likely to push for further digitalisation, reducing the need for in‑person visits to KRA offices—a significant cost saving for small businesses operating on thin margins. Moreover, the requirement for regular performance reporting introduces greater transparency, enabling taxpayers to hold the agency accountable and to anticipate policy shifts before they become mandatory.

Practical steps

• Review your current tax compliance status on the iTax portal and ensure all filings are up to date before the new board’s quarterly reporting begins.
• Assign a staff member to monitor KRA announcements and the board’s published performance reports for any changes in filing deadlines or penalty structures.
• Consider engaging a qualified tax adviser to assess whether the new board’s emphasis on technical expertise opens up opportunities for tax incentives or reliefs that were previously overlooked.
• Update internal tax policies to reflect the likely push for greater digitalisation, including training staff on e‑filing tools and electronic record‑keeping.

Tax Planning & Compliance services at Beavoren Ventures can help your business navigate the evolving KRA landscape, ensuring that you meet new reporting requirements while optimising your tax position.

Book a consultation with Beavoren Ventures today and let us handle your compliance, books, and advisory in one place.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.