EconomyKRA Surpasses 4-Month Revenue Collection Target in October, Nets 154 Billion

KRA had a surplus of Kes.5.9 billion in revenue from Domestic Taxes where Kes. 96.6 billion was collected against a target of Kes. 90.7 billion.
KRA Commissioner General James Mburu. Image: Courtesy

Revenue collection in the month of October has surged 23.2% to reach Kes. 154.4 billion shillings, Kenya Revenue Authority (KRA) has said.

The Taxman had set a target of Kes. 142.3 billion for the month going into the second quarter of the FY 2021/22 representing a performance of 108.5%.

Cumulative revenue collection in four months to October has similarly grown 28.3% to stand at Kes. 631.1 billion against a target of Kes. 603.9 billion.

During the month under review, Customs and Border Control revenue accounted for Kes. 57.4 billion of the total collection against a target of Kes. 51.2 billion reflecting a performance rate of 112.1% and a surplus of Kes. 6 billion.

On the other hand, KRA had a surplus of Kes.5.9 billion in revenue from Domestic Taxes where Kes. 96.6 billion was collected against a target of Kes. 90.7 billion.

Pay-As-You-Earn (PAYE) registered a collection of Kes. 37 billion against a target of Kes. 36.5 billion registering a performance of 101.5%.

“The sustained strong performance is a reflection of the improving global economic environment as well as the implementation of revenue enhancement initiatives by the authority,” said Githii Mburu, KRA Commissioner-General.

Mburu said the authority commenced the new financial year on an upward trajectory after surpassing its July-September target of Kes 461.65 billion by Kes 15 billion, recording a 30 per cent growth.

While the taxman attributes the good performance to a raft of measures geared towards boosting collection and sealing leaks, it currently has 570 tax disputes tied in courts with a tax assessment of Kes. 150 billion.

The taxman has been on an aggressive push to expand the tax base by targeting individuals and businesses who were previously excluded in the tax bracket as well as enhancing compliance by ensuring taxpayers file returns and pay correct taxes.

Similarly, the authority says it embarked on investigating entities whose profitability model is based on tax evasion and illicit trade in order to recover taxes and deployed the use of data and intelligence to unearth unpaid taxes.

KRA on Kenya’s GDP Outlook

“Kenya Tax to Gross Domestic Product (GDP) ration currently stands at 13.8%, indicating the need to continue enhancing tax collection and reducing tax expenditure in the form of exemptions and incentives to achieve the desired rate of over 20%,” said Mburu.

The Gross Domestic Product is expected to grow by 5.3 per cent in FY 2021/22 as per the 2021 Budget Policy Statement.

KRA aims to trim the tax gap estimated at 45% for VAT by enhancing tax base expansion and intensifying the fight against tax evasion and illicit trade.

Also Read: KRA Collection Hits Eight-Year High of Kes 1.67 Trillion in FY2020/21

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