The government is targeting larger collections from import duties and income taxes in the new 2026/27 financial year.
The government now targets larger collections from import duties and income taxes in the new 2026/27 financial year, indicating increased scrutiny of international trade and income from corporate and self-employment sources.
The National Assembly’s Budget and Appropriations Committee has revealed that of the Sh219.4 billion in additional revenue targeted for the next financial year, which starts in July 2026, Sh84 billion will be derived from import duty and income taxes.
“The growth in ordinary revenue will be driven by all tax heads. Specifically, Sh61.7 billion from income tax, Sh22.3 billion from import duty, Sh14.3 billion from excise duty, and Sh12 billion from other tax heads. Sh64.9 billion and Sh7.5 billion worth of the additional revenue will be from Appropriation-In-Aid and grants, respectively”, Budget Committee Chairman, Sam Atandi, told the National Assembly.
The additional revenue from income taxes is being projected at a time when the Kenya Revenue Authority (KRA) has stepped up an income and expenditure verification programme, which kicked off on January 1, 2026.
Times Tower in Nairobi, the headquarters of the Kenya Revenue Authority (KRA).
The authority says its expanded data visibility is being driven by the rollout of the electronic Tax Invoice Management System (eTIMS), which captures transactional information across the economy and links suppliers, customers, and transaction values.
The exercise pulls data from multiple sources—including electronic eTIMS invoices, withholding tax certificates, and import documentation—to verify figures declared by taxpayers.
KRA only last month reinstated the Nil Return filing option after completing system validations aimed at tightening tax compliance ahead of the 2025 income tax return cycle, which ends in June, easing concerns among taxpayers following a temporary suspension.
The KRA Business Strategy, Technology & Enterprise Modernisation Department said that the Nil filing option will apply to January-December 2025 income tax returns that will be filed after March 31.
The government is targeting larger collections from import duties and income taxes in the new 2026/27 financial year.
This is when enhanced validation checks embedded in the iTax system will come into force.
KRA maintains that the changes are part of a broader push to curb abuse of Nil filings, especially among taxpayers whose income was subject to withholding tax but who still declared zero income.
According to the National Assembly’s Budget Committee, the government expects to double its efforts in tightening tax revenue administration and widening the tax base in a bid to realise the additional tax revenue target set for 2026/27.
“This expansion in projected revenue collection reflects the impact of the ongoing tax administration reforms, improved compliance, and efforts aimed at widening the tax base,” the committee said.
In the six months ended December 2025, KRA realised Sh1.51 trillion worth of collections, including grants, falling behind its target for the first half of 2025/26 by Sh148.3 billion.
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