Response strategies by the Kenya revenue authority to challenges of tax administration in the east African Community Common market

Abstract

The implementation of the East African Community Common Market came with a number of requirements that required member states of the Common Market to enact legislations that would see that the provisions of the protocol were assimilated in to their domestic laws. The result of this was a review of domestic laws with a view to cause necessary amendments to ensure that they were consistent with the East African Community. One of the amendments was to harmonize tax policies in order to facilitate the movement of goods, services and capital and to promote investment within the Community. Definitely, the amendments affected the member states’ revenue authorities; Kenya being one of them; hence the Kenya Revenue Authority had to make adjustments to its tax administration for the harmonization to be achieved. This study sought to determine the response strategies by the Kenya Revenue Authority to challenges of tax administration in the East African Community Common Market. The objectives were to determine the challenges facing Kenya Revenue Authority in Tax administration in the East African Community Common Market and the response strategies adopted by the Kenya Revenue Authority to deal with challenges of tax administration in the East African Community Common Market. The study adopted a case study research design by targeting the staff of Kenya Revenue Authority as the respondents. The study interviewed five heads of department from each of the Departments of the Kenya Revenue Authority. The findings were analyzed qualitatively through content analysis to come up with conclusions and recommendations. It was found out that the Kenya Revenue Authority faced a number of challenges in tax administration in the East African Community Common Market especially with the harmonization of the tax administration systems. The response strategies adopted to deal with the challenges included examining the environment and gathering information that could be used to predict or respond to changes related to East African Community Common Market, monitoring, implementation and customizing its strategy in line with the implementation and creation of new systems and policies to help in the implementations process. The study recommends development of a strategic plan that includes East African Community Common Market implementation steps in it and a further study on harmonization of revenue systems in East African Community by looking at the success factors and barriers to the harmonization process.