KRA falls further below collection target, blames shilling, interest rates
Times Tower in Nairobi, the Kenya Revenue Authority headquarters.
What you need to know:
- Between July and November, the taxman collected Sh963.7 billion, which was 34.6 per cent of the Sh2.787 trillion target for the 2023/24 financial year.
- Taxes from petroleum products, which grew by 42.5 per cent, boosted revenue performance during the period, partly due to the rise of value-added tax (VAT) on the products since July.
The Kenya Revenue Authority (KRA) collected Sh1.03 trillion between July and last Friday, after November revenues grew by 15.8 per cent to Sh180.7 billion, compared to a similar month of 2022.
The collections were, however, a further fall in KRA's annual collection target as it struggles to raise revenue amid harsh economic times for Kenyans and businesses.
Between July and November, the taxman collected Sh963.7 billion, which was 34.6 per cent of the Sh2.787 trillion target for the 2023/24 financial year. During a similar period last year, the revenue administrator had collected Sh856.6 billion (40 per cent) of the Sh2.145 trillion annual target.
"Revenue collection has progressively increased in the last five months (July –November 2023/24) after KRA collected Sh963.746 billion compared to Sh856.646 billion collected in the same period last financial year, representing a growth of 12.5 per cent," said KRA commissioner, strategy, innovation and risk management Mohammed Omar in a statement.
Taxes from petroleum products, which grew by 42.5 per cent, boosted revenue performance during the period, partly due to the rise of value-added tax (VAT) on the products since July. The customs revenue grew by 17.6 per cent to Sh72.1 billion in November, the second-highest monthly collection of customs duty in the history of KRA. "The good performance is attributed to oil taxes that collected Sh27.943 billion, translating to a growth rate of 42.5 per cent over Sh19.610 billion collected in the same period in the last financial year. The good performance of oil taxes was mainly driven by growth in both overall oil volumes and values by 36.7 per cent and 49.5 per cent, respectively.
"The growth was also driven by the positive impact of tax policy, which includes the VAT rate change from eight per cent to 16 per cent vide Finance Act 2023," KRA stated.
The taxman also said domestic taxes in November amounted to Sh108.2 billion, a 14.7 per cent growth from Sh94.3 billion in November 2022.
The KRA said revenue collection continues to be affected by factors including depreciation of the shilling and increasing commodity prices, which have driven down import demand.
"While import values (in Kenya shilling terms) grew by 36 per cent and 11 per cent in November 2023 and July—November 2023, respectively, in dollar terms, the growth for the month was subdued to nine per cent and a decline of 9.2 per cent recorded cumulatively," said the authority, which is eyeing Sh2.787 trillion in the year to June 2024 but collections have been below target in the first five months of the financial year.
