Globally, governments require a certain amount of revenue to function. The United Nations Commission on Trade and Development (UNCTAD) estimates that $5.4 trillion to $6.4 trillion is required annually from 2023 to 2030 for achievement of the Sustainable Development Goals (SDGs). This poses immense pressure on revenue administrations in implementing effective strategies in revenue mobilization to drive development. Corruption undermines the achievement of these goals particularly for revenue mobilization.  This is no different for Kenya Revenue Authority. 

Efficient revenue collection comes with its fair share of challenges ranging from tax avoidance to administrative inefficiencies that pave way to corrupt practices. In addressing these challenges, the Authority has put in place various measures to curb corruption including risk assessments and mitigation plans, awareness creation and corruption reporting. While these strategies have worked in curbing corruption, there is still more to be done.

In its National Ethics and Corruption Survey (NECS) 2023 report, the Ethics and Anti-Corruption Commission (EACC), made recommendations for public institutions to collaborate with strategic agencies and stakeholders for a coordinated and effective approach to tackling corruption.  The complex and dynamic nature of corruption warrants government agencies, oversight bodies and businesses to act together. 

In light of this, the concept of collective action emerges as a strong force in supporting anti-corruption efforts for enhanced compliance. Collective action refers to actions undertaken by individuals and/or groups towards a common purpose or goal. This can take the form of implementation of multi-stakeholder initiatives through sustained cooperation. Hence, collaboration with stakeholders such as partner government agencies, businesses, taxpayers, other revenue administrations, and oversight bodies is crucial for effectively addressing corruption.

This article explores how collective action plays a pivotal role in anti-corruption efforts and highlights its significance in promoting transparency and, accountability.

Strengthening institutional capacity: Many tax administrations, particularly in developing countries, face capacity constraints in terms of human resources, technology, and institutional capabilities. Collective action initiatives offer avenues for capacity building and technical assistance, enabling tax authorities to enhance their tax compliance efforts and strengthen their administrative systems.

An effective anti-corruption compliance program is hinged on enhancing the capacity of employees to comply with anti-corruption policies. Case in point, the Authority in cooperation with the World Customs Organization (WCO) continues to implement the WCO Anti-Corruption and Integrity Promotion (A-CIP) Programme. This involves running of capacity building initiatives to enhance the capabilities of customs administrations in addressing integrity challenges. It includes training programmes for customs officers, workshops and technical assistance programs to strengthen institutional frameworks, develop effective anti-corruption measures to improve staff integrity.

Through collective action, the Authority in collaboration with EACC has achieved this by training of Corruption Prevention Committees (CPC) and integrity assurance officers (IAOs). This enhances the capacity of employees to implement compliance obligations of the integrity program. Compliance teams also undergo training to ensure sustainability of ethical gains made and best practices. To bolster these efforts, engagements under the auspices of the East Africa Revenue Authority Committee on Integrity (EARATCI) provide practical experiences in compliance management of an anti-corruption programme in the context of tax administrations. Collective action enables implementation of the East Africa Revenue Authorities’ Integrity and Anti-Corruption Strategy where member countries share experiences, and lessons learnt in combating corruption and promoting integrity within tax administrations.

Information Exchange and Data Sharing: Information is a cornerstone of effective tax administration. Collaborative efforts for information exchange and data sharing facilitate the detection of tax evasion and the identification of high-risk taxpayers. Platforms such as the Automatic Exchange of Information (AEOI) enable participating jurisdictions to exchange financial account information automatically, thereby enhancing transparency and combating cross-border tax evasion. Similarly, initiatives like the Common Reporting Standard (CRS) facilitate the exchange of information.

Stakeholder Engagement and Public Participation: Within governmental structures, collective action takes various forms, ranging from citizen participation in decision-making processes to collaboration among different functions of government. Participatory mechanisms such as stakeholder engagements sessions, public consultations, and taxpayer engagement forums enable Kenyans to engage directly with policymakers, providing valuable input and feedback on proposed policies and initiatives. One of the key factors that lead to corruption in tax administrations is the complexity of tax and customs laws. Taxpayers rely largely on tax officials for interpretation of tax legislation. This creates a corruption loophole in situations where taxpayers are not aware of their obligations, responsibilities and services available to them for free.

Typical case is the application of the KRA PIN. The National Ethics and Corruption Survey (NECS) 2023 report highlights the application for KRA pin number as one of the services prone to bribery. In addressing this gap, concerted efforts towards taxpayer education is key in equipping citizens with required information on the application process. Platforms for taxpayer engagement and feedback mechanisms provide an opportunity for the authority to educate taxpayers on new policy changes and the service delivery charter. 

International and interagency Cooperation: Tax authorities engage in international cooperation to combat cross-border tax evasion and avoidance. This involves mutual assistance agreements, joint investigations, and information-sharing agreements between countries to address tax evasion and ensure that taxpayers pay their fair share of taxes.

Collective action plays a vital role in addressing global challenges that transcend national borders in the trade facilitation arena. It warrants involvement of governments, international organizations, the private sector and other stakeholders to enhance efficiency and simplify the international trade process. The Authority through the Border Control and Operations Coordination Committee (BCOCC) continues to ensure harmonized operations at all land borders with other agencies.  In carrying out the border management function, the Authority cooperates with other agencies in conducting joint border enforcement initiatives such as cargo verification, destruction of seized goods and patrols.

The nature of customs operations globally, exposes customs officials to immense corruption risks due to direct contact with people and the time sensitiveness for clearance of goods. International and interagency collaboration enables coordinated customs integrity programs to combat corruption as set out in the 10 Principles of the Revised Arusha Declaration.

Collective action in tax administrations represents a strategic approach to address the challenges of revenue mobilization, anti-corruption and tax compliance in an increasingly interconnected world. In trade facilitation, it is essential for stimulating economic growth, fostering inclusive development by facilitating the smooth flow of goods across borders and enabling businesses to access markets more efficiently. Cooperation increases the impact and credibility of anti-corruption efforts while enhancing transparency and accountability.

Through concerted efforts, tax administrations can realize their potential as catalysts for positive change, ensuring that tax revenues are mobilized efficiently and equitably for achievement of sustainable development of Kenya.

By;

Evalyne Awuor