The application of porter's value chain model at the Kenya revenue authority (KRA)

Abstract

The study was conducted to determine the extent of application of Porters Value Chain Model at Kenya Revenue Authority (KRA) and further to identify both areas of strengths which could be maximized and areas of weaknesses which require improvement and urgent attention in order for KRA to continue attaining its corporate targets. The study design was a case study conducted at KRA headquarters in Nairobi. Fifteen informers were interviewed, mainly senior managers at the grades of Senior Assistant Commissioner, Deputy Commissioner and Senior Deputy Commissioner. All the informers had attained graduate qualifications and the majority have served KRA for a period of between 10-15 years. This group was therefore well placed and familiar with the operations of their departments. The informers were drawn from four revenue departments namely Customs Services Department (CSD), Domestic Taxes -Large Taxpayers Office (LTO), Domestic Taxes -Domestic Revenue (DTD-DR) and Road Transport Department (RTD) which perform primary functions at KRA. In addition, eleven support departments participated namely, Human Resource Management, Procurement & Supplies Services, Finance, Research & Corporate Planning, Legal Services, Internal Audit & Risk Management, Investigation & Enforcement, General Management (Commissioner General's office), Administration, Information & Communication Technology (lCT) and Marketing & Communication. The findings of the study showed that Porters Value Chain Model is being applied at KRA; First there was evidence of departmentation where the revenue departments perform the core or primary activities while Porters secondary activities are performed by the support departments. Overally, the primary activities are performed to a large extent with a mean score of 3.4 on a 5-point rating scale, while individually, inbound logistics attained a mean score of 3.6, operations attained 3.5, outbound logistics attained 3.0, marketing & communication attained a mean score of 3.4 and Services at 3.3.The secondary activities were equally performed to a large extent with a mean score of3.9.Individual departments attained mean scores of ; Human Resource Department 4.2, Procurement & Supplies Services 3.3, Finance 4.0, Research & Corporate Planning 3.9, Legal Services 4.7, Internal Audit & Risk Management 3.9, Investigation & Enforcement 3.5, General Management (Commissioner General's Office) 4.5, Administration 3.6, Information & Communication Technology (lCT) 3.3 and Marketing & Communication 3.6. Even though the results show appreciation of the model, there are still value activities which need improvement if KRA is to attain higher performance levels. These include, need for additional funding for Revenue Administration Reforms and Modernization Programmes (RARMP) projects, additional staffing requirements, additional staff development programmes, continuous automation of processes within the support departments such as Procurement ,Human Resources, Finance ,Administration among others, need for improved service delivery through the practice of Service Level Agreements (SLA) and Relationship Management among others. Interestingly, the departments on their own evaluation felt they are performing above average .However, when rated by other department there is need for a lot of improvements required in service delivery. The need for continuous surveys on employee and customer satisfaction levels is critical for purposes of rating and identifying areas of improvement in the value chain both internally and externally. The study only looked at the internal value chain of KRA , there is therefore the need to study the value chains of KRA's customers, suppliers and other stakeholders like the Government, Central Bank of Kenya, Kenya National Audit Office, Kenya Bureau of Standards, Kenya Ports Authority, Kenya Airports Authority among others.