Achieving sustainable public sector reforms: a case study of tax administration reforms by Kenya revenue authority

Abstract

Reforming public institutions and practices is one subject that has attracted the attention of policy makers, practitioners and scholars in develo ping countries, including Kenya, for many years. Many people would like to see public sector institutions deliver services in an efficient and effective manner. This has resulted in growing pressure and demand for reforms, which in turn has led to governments introducing reforms aimed at improving public institutions. Many public sector reforms have failed due to corru ption, poor services and poor infrastructure. However, some public sector reforms have succeeded. Tax administration reforms in Kenya are one of those that have succeed ed. The implementation of tax reforms - either at a policy or design and administration lev el - has had its share of challenges. Nonetheless, the results are positive. Revenue incr eased from Kshs. 480bn in 2008 to Kshs. 635bn in 2012. This study seeks to find out why tax administration reforms by Kenya Revenue Authority succeeded. The focus of the study is on Integrated Tax reforms (iTax). The study notes that within government, an interaction of political and economi c motives affects the context in which reforms take place. There are interests and incenti ves of different stakeholders that affect reforms and policies. Public sector reforms are lin ked to political institutions and therefore the political context in which they are undertaken matters. The study draws the following key conclusions based on the findings. For any public sector reform to be successful, it has to be viewed as a p rocess rather than a one-time event. Second, there is need for establishment of an autonomous or semi autonomous body to govern the process. Third, that financial resources to support the reforms and stakeholders overall influence, ultimately determine the success of the public sector reforms. The analysis revealed that the likelihood of success may be high where the interests of all stakeholders converge with limited and powerless stakeholders wi th conflict of interest. Moreover, actors involved in public sector reforms should conduct pa rticipatory strategic planning, application of technology and continuous research for further i mprovement. Ultimately, the study established that the iTax reform, which resulted in increased tax revenue, was a sequence of events that were done successfully.