KRA tax system outage: Insider job suspected after rare revenue decline
Treasury Cabinet Secretary John Mbadi on Monday acknowledged the significant impact of the outage on the country's revenue collections.
The Kenya Revenue Authority (KRA) is facing a probe over a six-day tax system outage in November, which has led to a rare drop in collections.
Investigators are now exploring the possibility of an insider job being behind the failure of the Integrated Customs Management System (iCMS), which disrupted the clearance of goods at key entry points across the country, including the Port of Mombasa, Jomo Kenyatta International Airport, and inland depots.
More To Read
Treasury Cabinet Secretary John Mbadi on Monday acknowledged the significant impact of the outage on the country's revenue collections.
"They (KRA) are still doing their investigations. Some people are talking of some insider job. I still don't know, but I am waiting for the results that put us under a lot of stress at that time," he said during a TV interview.
The system failure came at a crucial time when Kenya was recovering from the effects of youth-led anti-government protests in June and July last year that had disrupted economic activity.
It prevented traders from clearing both inbound and outbound cargo, including key exports like tea.
With no access to the iCMS, which is the sole clearance system in Kenya, traders were stuck with goods, leading to delays and losses.
KRA's failure to collect taxes during this period caused a rare 1.4 per cent drop in November's revenue.
Major setback
The authority reported Sh160.32 billion in tax collections for the month, down by Sh2.28 billion compared to the same period last year.
Mbadi pointed to this as a major setback.
"We had KRA systems that failed for six days without collecting taxes. That led us to not meeting the targets," he explained.
The KRA had attributed the outage to "ageing infrastructure challenges" within the system.
"This specific outage was caused by the ageing infrastructure challenges and therefore KRA is in the process of replacing this infrastructure," the authority said.
KRA added that the system, despite its age, had served the organisation well.
However, State House has previously accused KRA staff of corruption and collaboration with tax evaders, further deepening concerns about the agency's internal practices.
In the past, President William Ruto has also voiced frustrations over KRA staff allegedly sabotaging the digitisation of revenue collection to prevent the government from sealing loopholes.
"There is resistance from KRA staff to digitise the revenue collection process," Ruto had said, highlighting the ongoing challenge of closing gaps within the tax collection system.
While the iCMS is intended to facilitate faster cargo clearance, the recent outage underscores Kenya's broader challenges in improving tax collection efficiency.
The tax-to-GDP ratio remains low compared to other nations like South Africa, and the country continues to struggle with widening its tax base.
KRA clarified that while trade taxes were directly affected by the system failure, income taxes, which are collected on due dates, were not as significantly impacted.
Top Stories Today
