Times Tower, the Kenya Revenue Authority's head office in Nairobi.
The Kenya Revenue Authority (KRA) is under pressure to collect at least Sh1.07 trillion in four months to June, following a streak of poor performance since July last year.
KRA netted Sh1.4 trillion in taxes between July 2024 and February 2025, which was 56.7 per cent of its annual target of Sh2.475 trillion.
This leaves the taxman with a balance of Sh1.07 trillion to collect in the four months from March to June 2025, equivalent to Sh267.8 billion monthly---leaving it with an uphill task going by the fact that its collections have averaged Sh175.46 billion over the eight months to end of February. In January and February particularly, KRA collections dropped to an average of Sh164.8 billion, passing over more burden of collections to the remaining four months. Between July and December 2024, collections had averaged Sh179 billion monthly.
KRA did not respond to enquiries by this writer on the streak of missed collection targets and how it would beat the challenge.
A recent report by the Parliamentary Budget Office (PBO) report warned that ordinary revenue performance has over the past three years fallen from 15.1 per cent of GDP to 14.5 per cent, noting that measures implemented to boost revenues have not borne fruits.
The Kenya Revenue Authority (KRA) is under pressure to collect at least Sh1.07 trillion in four months to June
“The revenue heads with the largest reduction include Income Tax which reduced from 6.9 per cent of GDP in the financial year 2021/22 to 6.6 per cent of GDP in the financial year 2023/24 and excise duty which reduced from 2 per cent to 1.7 per cent over the same period,” the PBO stated.
The office also noted that a poor tax performance by KRA over six months to December 2024 indicated that the government was below its half-year targets “and by extension the annual revenue target.”
The government has so far reduced its tax targets from the original Sh2.9 trillion to Sh2.47 trillion in the face of poor collections from the KRA. “Taking into account the ordinary revenue shortfall to December 2024 of Sh93.2 billion, the additional revenue from the Tax Laws (Amendment) Act 2024 and the Business Laws Amendment Act, 2024, the total revenue projections to June 2025 has been revised to Sh3,065.2 billion (17.6 per cent of GDP). Of this, ordinary revenue will be Sh2,580.9 billion (14.8 per cent of GDP) down from Sh2,631.4 billion in Supplementary Estimates 1,” Treasury said last month.
In the gazetted Treasury statements for February 2025, the Treasury puts the revised tax revenue targets at Sh2.47 trillion.
Poor collections by the taxman have had an impact on the disbursement of cash by the Treasury to counties and national government agencies, with frequent delays affecting salaries and projects.
