“Top Treasury officials felt he was not doing enough on the technological front to push for higher tax collections despite huge tech upgrades. The system downtimes had surged,” said the source, who spoke on condition of anonymity because the matter is confidential.
“He was asked in the morning to resign, but he declined. The board pulled the trigger early afternoon.”
Lilian Nyawanda, the Commissioner for Customs and Border Control, will act as the interim head of KRA.
The changes come amid pressure on KRA to weed out tax evaders and boost revenue through the use of technology.
Mr Wattanga was among a group of commissioners appointed shortly after President Ruto took office in September 2022, as the new administration sought to overhaul the country’s tax system.
The role proved challenging, with KRA bearing the brunt of public anger over aggressive tax measures aimed at steering the country away from debt distress.
Nonetheless, KRA has failed to meet its revenue targets since Mr Wattanga was appointed to the top job.
“The Kenya Revenue Authority (KRA) Board informs the public that it will not be renewing Mr Humphrey Wattanga’s contract of service as Commissioner-General. Consequently, and in accordance with his contract of service, he is proceeding on terminal leave effective immediately,” KRA chairperson Ndiritu Muriithi said in a statement this evening.
The board’s decision cuts short his first term, which was due to end in August, and comes weeks after KRA announced it had completed a revamp of its executive suite that started last July.
“He was fixed by tech. Treasury officials complained that there was no return on huge technology investments,” said a KRA executive who did not want to be named for fear of State reprisals.
Tech strain
The Treasury last year launched a probe into a suspected insider job at KRA as a possible cause of tax system outages.
It said the system failure had a major impact on revenue collections at a time when the country is racing to boost revenues and cut reliance on debt.
The Integrated Customs Management System (iCMS) failed earlier, halting clearance of goods through entry points such as the Port of Mombasa, the Jomo Kenyatta International Airport, and inland container depots and container freight stations (CFSs).
State House has previously accused the tax collection agency’s staff of cutting government revenue by engaging in corruption, colluding with tax evaders and taking bribes.
President William Ruto has also accused KRA staff of resisting and sabotaging attempts to digitise revenue collection in the past to prevent the government from sealing loopholes.
In terms of tax collected as a proportion of annual economic output, Kenya has been underperforming peers such as South Africa as it struggles to widen the tax net.
Revenue gap
This week, Mr Wattanga said KRA was ramping up the use of technology and enforcement tools to raise Sh932 billion in the final three months of the current financial year in a bid to meet its Sh2.97 trillion annual revenue target.
The aggressive final-quarter push comes after the agency collected Sh2.038 trillion by the end of March — the first time it has crossed the Sh2 trillion mark within nine months.
The receipts were Sh209 billion, or 11.43 percent, higher than the Sh1.83 trillion collected in a similar period the previous year.
The revenue, however, fell short of the Sh2.122 trillion target, leaving a gap and piling pressure on KRA to accelerate collections in the final stretch of the financial year.
The authority has introduced a WhatsApp-based filing service powered by an artificial intelligence chatbot known as “Shuru”, alongside USSD services targeting taxpayers without smartphones, in a bid to widen the tax base. The tools are aimed at drawing more informal sector players into the tax net.
The Electronic Tax Invoice Management System (eTIMS) has also been deployed to enhance real-time monitoring of transactions, particularly in value-added tax, where fraud and under-reporting have historically eroded collections.
Poached from the private sector, Mr Wattanga was tasked not only with boosting tax collection but also with transforming the image of the agency from one perceived as harsh and repressive.
His reform push included plans to rebrand KRA into the Kenya Revenue Service, one of several initiatives left incomplete.
An alumnus of Alliance High School, Mr Wattanga scored straight As in the KCSE, earning admission to Harvard University, where he studied biochemical sciences, before completing an MBA at the Wharton School of the University of Pennsylvania.
He built a career in finance, operating in investment management, most recently serving as managing director at Meghraj Capital.
He also previously served as commissioner and vice-chair of the Commission on Revenue Allocation for a constitutionally mandated six-year term.
President William Ruto on Wednesday evening nominated Wattanga as Higher Commissioner for Pretoria, South Africa.
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