A client seeking services at KRA headquarters, Times Tower, Nairobi on February 23, 2024.
Staff of the Kenya Revenue Authority (KRA) have missed out on a bonus from the government after they failed to meet their collection target for the financial year 2022/23.
The latest financial filings show that the taxman did not receive any bonus payment from the National Treasury during that financial year, marking a major blow to staff who received part of the Sh3.22 billion bonus it was given in the fiscal year 2021/22.
KRA usually apportions part of the bonus to its employees based on their individual performance, while the rest is spent on other areas of concern to the agency.
Following that bonus disbursal by the Treasury, the KRA in a gazette notice in November last year said that 8,477 staff members and nine board members would receive a bonus of Sh1.36 billion.
The agency also sanctioned seven staff for non-compliance with its performance management timelines.
The FY2022/23 is the first time in two years that the taxman failed to get a bonus after failing to achieve its revenue collection targets.
KRA traditionally gets a three percent bonus on the surplus revenue it collects. The bonus is aimed at encouraging the agency to step up its revenue collection efforts over the financial year.
In the financial year 2022/23, which was the first under President William Ruto, KRA collected Sh2.166 trillion in tax revenue. This was a performance rate of 95.3 percent as the revenue target for the year had been set at Sh2.273 trillion.
Failure to secure a bonus from the government saw KRA’s revenue decline by 11 percent to Sh30 billion down from the Sh33.7 billion that it earned in the previous financial year.
The last time the tax agency failed to get a bonus was in the 2019/20 financial when the Covid-19 pandemic ravaged the Kenyan economy, leading to a below-par tax revenue performance.
The agency however bounced back in the following year after raking in Sh1.669 trillion in tax revenue in the financial year 2020/21, which was above the target and leading to a bonus of Sh195.5 million.
KRA has been under increased pressure from the government to increase its tax revenue collection in recent years as the debt repayment burden, coupled with increased ministerial and county spending continues to rise.
The agency has embarked on a tax base expansion drive which has seen it employ thousands of new permanent and pensionable staff to fill vacancies.
Last year, it also recruited 1,400 field officers to go after businesses across the country to introduce thousands of new taxpayers into the tax system.
KRA is also betting on the deployment of technology to streamline the monitoring and collection of tax, voluntary tax disclosure programme, and alternative dispute resolution as some of the strategies to enhance the collection.
“KRA has also embarked on continuous and close monitoring to ensure compliance across all tax heads. The extensive use of data and intelligence to unearth unpaid taxes has led to improved voluntary compliance and tax base expansion,” said KRA chairman Anthony Mwaura.
But the tax agency is also poised to miss a bonus for the second year in a row after failing to hit its revenue target in the year to June 2024.
KRA collected Sh2.407 trillion during the year against a target of Sh2.5 trillion translating to a performance rate of 95.5 percent in a tough year underpinned by high inflation and increased taxation.
