Income Tax Collected Falls by 1.3% in First 11 Months of FY20/21
Data published on the Kenyan Gazzette shows Income Tax in Kenya for the first 11 months of the fiscal year 2020/2021 fell by 1.3% to Kes 1.313 trillion compared to Kes 1.329 trillion collected in the same period last year
In May, the National Treasury announced the tax revenue dropped to Kes 123 billion from Kes153 billion that was collected in April, the first month on month decline this year despite the government’s effort to increase revenue through the introduction of digital tax and minimum tax.
The decline in revenue was however attributed to the decline in corporate earnings and weak economic activity in the past economic year due to the prevailing pandemic and the measures put in place to curb the spread.
As of 31st May 2021, domestic borrowing amounted to Kes 770.6 billion below the government’s estimates of Kes 853.8 billion. External loans and grants amounted to Kes 124.4 billion, a sharp drop from the Kes 214.8 billion collected in 2020.
In March, the government signed an agreement with the International Monetary Fund (IMF) in which IMF agreed to loan Kenya $2.34 billion to support economic recovery. Part of the agreement with the IMF required the government to raise revenues and control spending in order to lower the amount of public debt to sustainable levels. However, according to the report published in the Kenya Gazette, Kenya has so far not succeeded in raising tax revenue.