Influence of Resource Allocation on the Performance of the Kenya Revenue Authority

Abstract

Good performance of revenue authority through a steady flow of incomes is an indicator of the financial health of a country in its role of providing: public services, infrastructure, and social programs support. Prioritizing an efficient tax system reduces dependence on foreign aid and also fosters domestic revenue generation. However, developing countries have not been able to finance their budgets internally ending up relying on loans from the International Monetary Fund (IMF) and World Bank. These loans become hard to manage with high dependencies on lending institutions becoming debt trap cycles hindering their economic sustainability. Kenya, according to the World Bank (2022), through a debt sustainability report revealed that the present value of total debt to gross domestic product was at 70.5% in 2020, 76.3% in 2022, and is projected to be at 79.2% in October 2023.Huge debt by the Kenyan government running in Trillions of Kenya shillings is attributed to high borrowing from deficiencies in collections by the Kenya Revenue Authority. These unfolding statistics require appropriate strategic initiatives in resource allocation to correct the situation on the performance of the Kenya Revenue Authority. This paper sought to examine the influence of resource allocation on the performance of the Kenya Revenue Authority. The study applied a descriptive research design. The target population for the study was the Kenya Revenue Authority. The unit of analysis included 196 middle-level managers of KRA from the Finance department (87), Human resource department (43), Marketing and communication departments (39), and Corporate service and administration departments (27). The stratified random sampling method and the Slovin formula were applied to obtain a representative sample size of 132 respondents. The study gathered data through online surveys and questionnaires which were physically administered. Data collected was analyzed through both descriptive and inferential analyses. Results revealed a β of 0.691 and a p-value of 0.001, between resource allocation and the performance of KRA. The study concluded that resource allocation had a positive and significant influence on the performance of the Kenya Revenue Authority. The study recommended optimizing resource allocation to align with strategic goals to enhance operational efficiency. Furthermore, the study recommended fostering inclusivity and staff participation to boost organizational resilience and innovation. Moreover, the study recommended prioritizing investment in ICT infrastructure to ensure competitiveness and productivity. Lastly, the study recommended that maintaining adequate staffing levels and empowering employees through training would foster a motivated workforce to enhance KRA’s adaptability, performance, and long-term sustainability.