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MPs question KRA’s KES 1.2B automated tax collection tender

11 March 2015, 10:30 Samuel Kisika

Nairobi – The National Assembly Public Investment Committee (PIC) grilling the procurement of a multi-billion automated tax collection system by the Kenya Revenue Authority (KRA) has raised questions on the legality of the process.

The committee which had summoned KRA Commissioner General, John Njiraini asked him to provide detailed information regarding the procurement of a KES 1.2 billion Integrated Customs Management System (ICMS).

The automated ICMS tender project began last year to replace KRA’s Simba system, an old customs management system, with the new system seeking to fully automate customs and revenue collection applications.

Njiraini told the committee that the Authority neither observed the laid down Public Procurement and Disposal Act, nor involve the public in the procurement process as required by law in awarding the tender.  

“This is a grant, 100 percent funded by Trade Mark East Africa (TMEA). There are no cost implications and we are not going to pay anything in terms of the equipment,” said Njiraini.

He said although KRA has never done business with TMEA, which is a consortium of donors from the European countries to fund trade projects, the organization is reputable globally since it has partnered with the Kenya Ports Authority and various Revenue Authorities in East African region.

Read Also: Parliament seeks clarity on railway tender

Njiraini assured that once the automated system is installed, the current system and sub-system malfunctioning caused mainly by outdated hardware and software hosting the system and inefficient network infrastructure will be addressed.

According to the tender, TMEA will install and manage the entire project while KRA will only provide the required technical support.

ICMS, having an in-built dynamic risk based approached to control imports and exports, will increase trader compliance in addition to reducing the need for manual paperwork, enhancing efficiency in the cargo clearance process, safeguarding revenue as well as reducing the cost of doing business in the country.

Although Njiraini defended KRA’s move to award TMEA the tender, PIC chair Adan Keynan directed him to furnish the committee with detailed information on the procurement agreement.

“This committee wants to get full information from KRA on this tender. We want to know whether the government will incur any costs,” said PIC’s Chair, Adan Keynan.

The committee’s chair, Kimani Ichung’wa who is also Kikuyu MP, asked Njiraini to disclose real owners of TMEA and why KRA decided to award it the tender through single-sourcing process.

The committee also wants KRA to table the financing agreement in addition to details of another bidder that is opposed to decision to award TMEA the tender.

The competitor bidder wrote to the Public Procurement Oversight Authority (PPOA) in February alleging that the installation of the ICMS was riddled with irregularities.

PPOA was thus asked to probe allegations that TMEA bidder, who qualified for both technical and financial evaluation, provided doctored information on her earlier projects and had pending integrity issues in Nigeria.

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