Agent model will expand KRA's reach, deepen tax compliance

Improving compliance among taxpayers is a major concern for governments around the world. Tax administrations globally are at a pivotal moment, as modern technology reshapes the tax ecosystem and elevates the importance of taxpayer support service in promoting compliance.

Effective taxpayer support service is the cornerstone of a functional and compliant tax system. While numerous strategies exist to enhance these services, a key guiding principle is ensuring easy accessibility, providing accurate, timely information to taxpayers and tax administrators at the lowest possible cost. This principle spans three core areas; simplifying the tax structure, offering comprehensive assistance, and facilitating tax compliance.

However, this can only be achieved if tax support services align with the needs of taxpayers. Bringing services closer to where taxpayers live and work can significantly boost compliance while reducing the associated costs of compliance.

Kenya Revenue Authority (KRA) currently operates 136 service points countrywide, serving over 20 million registered taxpayers. Most of these service points are located in major towns, making it difficult and often costly, for many citizens to access tax services, especially in rural and underserved areas. Some taxpayers have to travel long distance to access KRA services which comes with cost.

There is, therefore, an urgent need for KRA to expand its footprint by increasing its touch-points across the country. Making services more accessible to various taxpayer segments is essential. One promising approach, proven effective in spreading the footprints especially in the banking sector, is the agent model.

The agent model's primary advantage is its ability to bring services closer to the public. For instance, Kenya Commercial Bank uses a vast network of over 16,000 agents to significantly extend its reach and enhance the customer experience beyond its 210 traditional branches. This model has also been successfully implemented by other institutions, including Equity Bank (42,000 agents), Co-operative Bank and Absa Bank (17,000 agents each), and Safaricom (7,793 agents).

As the tax agency mandated to mobilise government revenue, funds that support public services and national development, KRA must adopt similarly innovative solutions that go beyond traditional office-based service delivery. Traditional tax offices often struggle to reach rural and marginalised communities due to geographical and infrastructural challenges.

To address this challenge, KRA, through its Micro and Small Taxpayer Department, is implementing the agent model to expand its footprint and enhance accessibility. This strategy aims to provide tax services to areas with limited or no physical KRA offices. By establishing a widespread network, particularly in informal and rural areas, taxpayers will be able to access services such as filing returns, making payments, and other essential function at convenient local points. This will eliminate the need for long distance travel, thereby simplifying the tax process for small businesses, informal sector players, and individuals in remote areas.

KRA’s plan to recruit agents and establish tax kiosks in every county ward demonstrates a strong commitment to making tax services more accessible. It is a strategic move toward ensuring that every citizen has a local touchpoint for engaging with the tax system.

Research has shown that a simplified and accessible tax system significantly boosts voluntary compliance by reducing misperception and lowering the costs associated with navigating complex procedures. Furthermore, effective taxpayer assistance, offering support not just in information provision, but also in filing, payments, dispute resolution, and query handling, builds trust and reduces the likelihood of conflicts.

Beside simplification of tax process, broadening the tax base is a core priority for KRA, and adopting the agent model is a powerful tool in achieving this. By decentralising taxpayer support through agents, KRA allows individuals to access services in familiar, trusted environments.

However, the success of the agent model depends on more than just physical presence. It hinges on building public trust, ensuring data security, and implementing robust training programs that equip agents to serve as knowledgeable and reliable tax ambassadors.

KRA’s decision to implement this model is a bold and essential step toward creating a more inclusive, efficient, and citizen-focused tax system. By taking services directly to the people, KRA is not only enhancing revenue collection, it is actively fostering a culture of voluntary compliance and civic responsibility. The shift from enforcement oriented approach to a service-driven, facilitative model is truly transformative. Additionally, the initiative will create job opportunities for Kenyans to become agents, thereby  contributing to the economic development of our nation.

If implemented effectively, KRA will be the first tax administration to adopt this model in the continent. The initiative will also stand as a testament to KRA’s foresight and commitment to serving all Kenyans, paving the way for a more equitable and prosperous future for the nation.