The National Treasury Building in Nairobi.
The government’s shift to a single paybill for collection of revenue has continued to boost fees from provision of public services, seeing appropriations in aid (AiA) grow by Sh18.5 billion in a quarter.
In the three months to the end of September 2024, the State netted Sh111.3 billion in AiA, up from Sh92.8 billion that was collected during a similar period in 2023.
The quarterly collections from services public agencies provide to Kenyans, also surpassed targets for the three months by 28.8 per cent, even as the Kenya Revenue Authority (KRA) continued to face challenges in tax collections.
In its December economic bulletin, the Parliamentary Budget Office (PBO) attributes the strong AIA performance to centralisation of collections since 2023, which has seen Kenyans pay for public services through a single paybill (222222) as agencies are barred from collecting payments and fees for services through other accounts.
“There was strong revenue performance during the first quarter of FY 2024/25, which was driven by an increase in AiA. The improved performance of AiA collection was partly attributed to the digitization and centralisation of AiA collection through e-citizen,” the PBO notes.
The government has since 2023 digitised over 15,000 services that are now being provided through the e-citizen, with their payment being made through a single paybill for central tracking of cash flows in government by Treasury, a factor that has been attributed to growth of AiA collections.
Treasury targeted to collect Sh86.4 billion in AiA during the three months, but by end of September 2024 Sh111.3 billion had been generated.
During the first quarter of the 2024/25 fiscal year, however, tax collections totaled Sh590.8 billion against a target of Sh605.5 billion, following a poor performance across all tax heads.
“Ordinary revenue fell short of the target by Sh14.6 billion. This was as a result of the underperformance of the Value Added Tax (VAT) by Sh15.2 billion, Excise Duty (by Sh5.6 billion), Import Duty (by Sh2.8 billion) and Pay-As-You-Earn (by Sh1.8 billion),” the PBO notes.
While tax collections failed to hit targets, however, they increased by Sh54 billion (10 percent) compared to a similar period in the 2023/24 fiscal year.
