Top taxpayers revealed as KRA nets Sh2.8 trillion

The manufacturing and energy sectors cemented their position as Kenya's largest taxpayers in the financial year ended June, helping the Kenya Revenue Authority (KRA) raise an extra Sh272.95 billion in annual collections, despite missing Treasury targets.

KRA announced tax collections rose 10.6 per cent to a record Sh2.844 trillion in the review period, marking the second-fastest annual revenue growth in the past four financial years.

The performance reversed last year's slowdown, when revenues grew 6.9 per cent to Sh2.572 trillion against 11.1 per cent a year earlier. The latest increase surpassed the Sh241 billion growth recorded in 2023/24 and extended a five-year expansion that has lifted revenue from Sh1.669 trillion in 2020/21.

KRA said manufacturing, energy, financial and insurance, information and communication technology (ICT), and wholesale and retail trade sectors, generated about 62 per cent of total revenue.

This is despite the five sectors accounting for 27.4 per cent of overall nominal gross domestic product (GDP)—a measure of all economic activities by the government, companies, and individuals, excluding inflation—underlining their central role in financing the Exchequer.

Manufacturing remained the largest contributor after paying Sh462 billion, up 9.2 per cent from Sh423 billion a year earlier, while energy generated Sh445 billion after growing 9.1 per cent. Manufacturing and energy sectors contributed nearly one-third of all taxes and levies collected.

"Its [manufacturing] contribution is linked to value addition, jobs, supply chains and importation of raw materials, which accounted for 49.0 per cent of overall import value," the KRA said on Friday." The [energy] sector's performance reflects the link between energy [oil] imports, trade activity and revenue collected at the border."

Financial and insurance firms, including banks, are the third-largest taxpayers, contributing Sh320 billion from Sh311 billion the previous year. KRA said corporation tax accounted for 34.8 per cent of sector collections, while withholding income tax and PAYE jointly contributed 47.1 per cent.

ICT generated Sh248 billion from Sh230 billion a year earlier, supported by excise duty on airtime and financial services, corporation tax, domestic VAT and PAYE.

“Despite the mixed economic environment in FY2025/2026, taxpayers exhibited resilience and voluntarily paid their taxes to support the country’s economic transformation,” Commissioner General Adan Mohamed wrote in the statement. “KRA remains committed to simplifying tax payment processes and ensuring a positive taxpayer experience.”

During the year under review, corporation tax receipts rose 14 percent to Sh347.07 billion as company profitability improved.

KRA said digital services and communication-related transactions continued shaping business activity and tax collections in the year under review.

Wholesale and retail trade contributed Sh288 billion after expanding 10.3 per cent, reflecting the performance in trade, distribution, consumption and business transactions across the economy.

The data showed that exchequer revenue increased 10.5 percent to Sh2.568 trillion but achieved 95.2 percent of the Sh2.698 trillion target set by the Treasury. Agency revenue collected for other government institutions grew 11.2 percent to Sh276.14 billion, equivalent to 99.1 percent of the target.

Customs revenue, however, exceeded expectations after collecting Sh988.78 billion against a Sh980.79 billion target, driven by strong oil and non-oil imports. Domestic revenue, however, reached Sh1.851 trillion, underperforming target by about seven percent.

PAYE grew at a relatively slower 6.7 percent to Sh598.81 billion, reflecting slower expansion in formal employment, while domestic VAT grew 8.5 percent to Sh355.26 billion.

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