Effects Of Ict Support Services On Revenue Collection
[CASE STUDY OF ENYA REVENUE AUTHORITY]

1.1.1 ICT Application

Computerization of tax or income collection systems involve investing in up to date technology for instance: information communication technology (ICT) so as to advance the revenue system to attain integration and improve on information sharing in order to improve system effectiveness and efficiency. All departments in the organization “should put in place an effective and efficient revenue collection system in monitoring framework that ensures adequate supervision of the budgeted programs and project activities to enhance accountability and absorption of resources” (Amin, 2013;15). Tax reforms and revenue collection structure and system are influential in trying to improve and simplify tax administration by using new technology such as ICT.

Tax or revenue administration automation had a positive effect on the cost of tax administration, automation and effectiveness of revenue collection. In furtherance, “automation of process at revenue collection points has a positive impact on the tax clearance time” (Haughton & Desmeules, 2001; 7). They further assert that “automation of Tax-Information Processing System does not require high equipment cost, but rather helps to ease the burden of over-staffing, high re-engineering cost confronted by among other government institutions” (pg. 8).

1.1.2 Revenue Collection

Municipal income generation is a fundamental element for financial policy and management in any monetary system because of its influence on country?s operation. Revenue is the engine for any government since it?s the key instrument which ensures government funding thus “tax revenue collection should comply with best practices of equity, ability to pay, economic efficiency, convenience and certainty” (Visser & Erasmus, 2005:10).

There is an increasing need by the government to collect much revenue by way of taxes to face the increasing financial expenditures budgeted by the country. System automation has been proven capable of introducing immense efficiencies into business procedures which could result in increased revenue collection (Zhou & Madhikeni, 2013). Application of technological solutions towards the strategic goals for government is a key step towards transforming government into an entity that can keep abreast of the needs, requirements and expectations of today's modern world.

1.1.3 Kenya Revenue Authority

Kenya Revenue Authority was formed in 1995 as a semi-autonomous government agency with the general aim to provide operational sovereignty in revenue collection and administration. The agency is headed by a Chief Executive who is primarily accountable to a self-standing Board of Directors. Nevertheless, the cabinet secretary in charge of finance holds responsibility for policy direction as KRA is still an agent of the Kenyan Government. During its formation KRA brought together the then Departments of Income Tax, Value Added Tax, Customs and Excise which were departments from the Ministry of Finance as well as the Road Transport Department which was from the Ministry of Transport (KRA, 2012).

During its earlier years of its inception KRA faced daunting challenges in terms of poor operating procedures and undocumented internal business processes. It also faced poor and inadequate use of ICT in its operations. There were also challenges of a negative corporate culture, lack of integration and collaboration among the revenue collecting departments, poor work ethic from its workforce leading to poor levels of integrity among staff and a poor public image from external publics. The non- integration of departments leads to lack of a common corporate culture, lack of synergy in operations and duplication of efforts and structures due to poor organization structure based on tax heads rather than on functional lines. A June 2002 report by Transparency International; Kenya ranked KRA 14thout of a sample of 50 public institutions on corruption, this meant that the organization was facing serious staff integrity challenges (KRA, 2012).