Kenya’s tax agency missed its revenue target by KES 107 Billion

By Victor MUJIDU

The Kenya Revenue Authority (KRA) has missed its annual revenue collection target for the financial year 2022/2023 by Sh107 billion, attributing it weak economic growth which loosened from 7.6 per cent in 2021 to 4.8 per cent last year.

Despite the drop, the taxman’s Sh 2.166 trillion in tax revenue for the financial year ended June 2023, represented a 6. 7 percent rise compared to the previous financial year, when the agency managed Sh2.031 trillion.

“The revenue performance reflects the prevailing economic indicators, especially the projected GDP growth of 5.8 per cent in FY 2022/2023 compared to a growth of 6.5 per cent in FY 2021/2022”, said acting Commissioner-General, Rispah Simiyu.

According to the taxman’s performance score, the financial year ended June 2023 translated to a 95.3 per cent rate of revenue collection with the report revealing that it’s the first financial year in two consecutive ones that the KRA had missed its target.

Among the economic sectors, the KRA has recorded an upright trajectory in performance including Excise taxes, Income taxes, Taxes on goods and services, Profit, and Capital gains among other sectors.

Tax performance in various economic sectors

Domestic VAT collection stood at KES. 272.452 billion reflecting a growth of 11.3 per cent compared to the previous year.

Excise on Betting registered a stellar performance rate of 116.2 per cent after collecting KES 6.640 billion against a target of KES 5.715 billion. Excise on Betting collected a surplus of KES 925 million and grew by 30.0 per cent compared to the same period in FY 2021/2022.

Corporation tax performed at 94.2 per cent with a collection of KES 263.819 Billion. This is a growth of 9.0 per cent over the last financial year. Pay As You Earn (PAYE) registered a growth of 7.2 per cent after collecting KES. 494.979 billion.

KRA collected KES 5.328 billion in digital taxes,a growth of 207.9 per cent.

It targets to collect KES 2.768 trillion by the end of the Financial Year 2023/2024 and surpass the KES 3 trillion mark by the Financial Year 2024/2025.

KRA said it is confident that it will achieve the target and enable the Kenya Kwanza government to finance its Bottom-Up Economic Transformation Agenda (BETA) and sustain the country’s economy.