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KRA Automation

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KRA Automation

Revenue collection is necessary and has become a valuable aspect of society and

governance. Revenue collection traces back to the era of early civilization where governments

used it as a tool for sustenance and fulfillment of public needs (Broadway, 2012). It is necessary

for tax collection to be in line with the ethical guidelines that control its practice. Some of the

ethical guidelines of revenue collection include economic capacity, equity, guarantee,

convenience and the ability to pay (Visser & Erasmus, 2005). Notably, governments operate as

organizations and will seek to limit expenditure at all costs to maintain a reasonable budget and

national debt. To this light, governments utilize accounting and control practices that allow them

to remain within budget and ethical framework. Budgetary measures as well as checks and

balances are two of the main policies that the government can use to control the execution of

revenue collection and limitation of public expenditure (Ireland P., 1994). This covers the entire

rationale behind public and private corporations as they seek to reduce expenditure and

maximize revenue. It is necessary to implement these policies as a way of maintaining the

government's capacity to fulfill its objectives (IMF, 2014). Nonetheless, the government must

establish a solid foundation that will directly impact its efficacy in revenue collection. The best

way to approach these efficacy issues is to implement technology which simplifies and optimizes

government operations.

Automation allows them seamless updating of technologies in their use within revenue

collection and government operations. In essence, automation eliminates the loopholes for fraud

and corruption which would otherwise be counteractive for the government's objective of

reducing expenditure and optimizing income (De Wulf & Sokol, 2005). Automation has also

been significant in increasing the tax clearance time which consequently affects staffing issues,
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evaluations and accountability. The main way through which automation decreases

embezzlement is by synchronizing important software and systems making it simple to operate

from a common repository (Haughton & Desmeules, 2001). Both public and private corporations

benefit from automation in revenue collection because it helps them to fulfill their goals while

eliminating risks and fraud.

The implementation of technology in customs and revenue collection requires the

utilization of information communication technologies. ICT promotes the achievement of

fundamental business objectives for the customs department (Dramod K, 2004). The main goal

for customs as pertains to technology is to fast-track the clearance process so as to reduce the

time that the client is in contact with the institution. Importantly, the clearance process from the

entry stage, registration and verification of the cargo to the arrival of goods at the customs

department can be significantly shortened using ICT softwares. The relevant ICT systems used

within the customs clearance process contain a range of consistently updating technologies such

as telecommunication inventions (De Wulf & Sokol, 2005). Some of the telecom equipment used

within this process include TV, computers and mobile phones. Other intricate softwares include

data systems, the internet and intranet, among others. Experts have conducted research that

illustrates the benefits of ICT improving efficiency in trade procedures.

Additionally, it allows small business players to access the international trade realm

which helps them to grow and reach a bigger audience. For this reason, there is swift

transportation and reliability of goods moving into and out of third world countries. ICT has

allowed poor countries to develop interest in the global supply chain by facilitating the entire

process (UNECE, 2012). In essence, this trade facilitation is the fundamental driver for

international trade participation and efficiency which leads to economic advancement of third
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world and first world countries. Economic growth is a direct outcome of global competitiveness

and market consolidation which happens due to direct foreign investments. Economies can enjoy

the impact of direct foreign investments because of the integration of complicated custom trades

processes. Furthermore, it allows the improvement of access to trade related infrastructure and

helps to establish a seamless procedure that simplifies the process for companies in poor

countries (Chisenga, 2006). Data from the World Bank shows that as the interest to take part in

world trade advances there is remarkable economic growth in many countries. The consolidation

helps to allocate resources in a better way, promotes healthy competition and allows for better

practices and efficiency.

Background of the study

Globalization is a direct outcome of the global supply chain due to the connection

between better manufacturing technology and growing economies. This means that revenue

collection on both ends of the global supply chain requires better practices and standardization to

improve operations and outcomes. Governments need to standardize the revenue administration

process to add value to its traders and promote the import and export of goods and services.

International trade grows as an outcome of globalization meaning the amount of cargo that

custom departments handle has increased significantly (De Wulf and McLinden, 2015). Different

ports around the globe are handling more than they did before technological advances and

globalization. For this reason, there is a need for streamlining the revenue collection process and

custom procedures to increase efficacy and give value to the taxpayers. Lane (1998) asserts that

the growth of international trade has created demand for trade consolidation and a variety of

policy related practices by custom administrators. This move is to allow traders to swiftly clear

their products with accountability, reliability and efficiency. The outcome for this integration
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will be the elimination of bureaucracies in the custom procedures which will bolster trade

facilitation. According to the World Bank (2005), customs reform is the range of policies and

laws replacing outdated ones as a way of staying in line with the dynamic global economy.

Custom reforms get rid of the outdated provisions that will not be relevant to the existing

international commitment. This action also enhances accountability and reliability by providing

sufficient information that simplifies complicated procedures for the trader. It is arguable that

custom administrators often face difficulties in fulfilling the constantly growing demands and

priorities given for their roles.

In the recent decade, many nations have emphasized the importance of utilizing both

resources and reforms to modernize their custom departments. Remarkably, these countries

receive significant monetary and technical support from international players and donors. Some

of the entities include the World Bank, the United Nations conference on trade and development,

International Monetary Fund among others. Regional banks are also vital in this transition as

they also offer technical and financial support (Honoham, 2003). International and regional

involvement has boosted the capacity for many countries to implement their custom programs on

policies. Nevertheless, some nations lag behind and have not fully achieved their custom reform

objectives. In other words, customs modernization is a theme and international development

agenda that many governments and financial institutions continue to emphasize and support.

Customs Modernization

The rewriting of the Kyoto convention was a generally acknowledged highlight for the

main elements of customs modernization. Revenue collection has been an ever-changing aspect

of society and the economy for centuries (Honoham, 2003). One of the main aspects of this

revenue collection that has stood the test of time is that it imposes on the citizens and is governed
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using a central department that enhances collection. The collected taxes will then be used to

implement projects that are good for the public (Chamey & Alberta, 1983). Despite this

fundamental principle, the tax collection systems are constantly changing due to the economic

norms and technological advances around the world. In today's era of technology, the basic

element of tax collection is fulfilled using software that allows the government to conduct this

process safely and conveniently. In the ancient age, tax collectors used rudimentary procedures

which the society did not enjoy or approve (UNCTAD, 2008). As a result, the tax collection

profession was a highly disliked one by society. In the modern era, society understands that tax

collection is significant in facilitating trade which helps to run the government and provide

necessary services (Ashok, 2007).

KRA Automation

The Kenya revenue authority emphasizes on the commitment to advance its tax

administration technologies and procedures. In the financial year 2014 to 2015, the KRA

advanced its automation levels by 2 points from 90 to 92 percent. Additionally, KRA wants to

increase its utilization of data management systems to improve efficacy and limit the

expenditure. This automation aims to reduce expenditure for both the trader and the parastatal

and promote more remittance while reducing administrative and operational costs. KRA also

wants to make its administration and collection capacity better using the ICT systems and

software. Internal controls aided by technology will help the poor stay till 2 monitor the import

and export of goods. Individual departments have also made different automation advances such

as the domestic taxes department has automated 95% of its operations while the investigations

and enforcement department have automated 78% of its operations.

Significance of the Study

The outcome of this research are important to different stakeholders that depend on the

information from customs department.

I. The government through the Kenya revenue authority requires this data in the

formulation of policies that aim at growing and promoting revenue collection. This data

is significant for the KRA in sealing the loopholes that hinder service delivery and

promote fraudulent activities.

II. The research outcomes will also directly affect the information on revenue collection

systems for traders. The traders require this information to understand the limitations that

the custom departments experience and the airport in reduction of delays at the ports

III. The study will also encourage other experts to investigate the custom and revenue

collection systems that are not fully highlighted within this research using its information

as a reference point.
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References

Ashok, 2007

Broadway, 2012

Chamey & Alberta , 1983

Chisenga, 2006

De Wulf and McLinden, 2015

De Wulf & Sokol, 2005

Dramod K, 2004

Haughton & Desmeules, 2001

Honoham, 2003

IMF, 2014

Ireland P., 1994

Lane, 1998

Lane, 2015

UNCTAD, 2008

UNECE, 2012

Visser & Erasmus, 2005

World Bank, 2005

World Bank, 2015