The Kenya Revenue Authority (KRA) has missed its revenue target for the Financial Year 2023/2024 by over Ksh380 billion.
In the Financial Year 2023/2024, KRA collected Ksh2.407 trillion against a target of Ksh2.787 trillion.
However, the collection was an 11 per cent (Ksh240 billion) growth in revenue as compared to Ksh2.166 trillion collected in the Financial Year 2022/2023.
“This represents a growth of 11% and a performance rate of 95.5%,” KRA stated.
“The year faced economic shocks like shilling depreciation, rising bank lending rates, and international conflicts disrupting supply chains, impacting revenue mobilization efforts.”
KRA is tasked with collecting exchequer and agency revenues. Exchequer revenue is for the National Treasury, while agency revenue is collected for other government agencies, including Road Maintenance Levy, Air Passenger Service Charge, Petroleum Development Fund, and Housing Levy.
KRA says exchequer revenue grew by 9.5 per cent to Ksh2.223 trillion, with a performance rate of 95.8 per cent while agency revenues amounted to Ksh184.036 billion, reflecting a growth of 34.9 per cent.
Domestic taxes grew by 14.4 per cent to hit Ksh1.611 trillion against a target of Ksh1.677 trillion, a performance rate of 96.1 per cent.
Customs taxes amounted to Ksh791.368 billion, a 4.9 per cent growth.
“Customs performance was affected by exemptions on certain food commodities and low consumption of petroleum products, with exemptions growing by 23.8%,” the taxman stated.
KRA on VAT
Domestic VAT collection stood at Ksh314.157 billion against a target of Ksh307.823 billion, a 15.3 per cent growth.
“The growth is attributed to the implementation of the Electronic Tax Invoice Management System (eTIMS),” the taxman stated.
“Domestic VAT average monthly collection stood at Ksh23.559 billion the first half of FY 2022/23, before increasing to a monthly average of Ksh26.250 billion in the second half of FY 2022/23 when eTIMS rollout was scaled up. Currently, monthly average domestic VAT collections stand at Ksh28.680 billion in FY 2023/24.”
KRA says Domestic Excise grew by 8.1 per cent to Ksh73.624 billion while Capital Gains Tax registered a 49.5 per cent growth to hit Ksh8.381 billion against a target of Ksh7.710 billion, a performance rate of 108.7 per cent.
“Corporation tax performed at 93.4% with a collection of Ksh278.156 billion. This is a growth of 4.9% over the last financial year,” KRA added.
PAYE grew by 9.7 per cent to Ksh543.186 billion. On non-oil taxes, KRA collected Ksh490.60 billion and Ksh300.77 billion on oil taxes.
“The revenue growth is attributed to the implementation of key strategies as enshrined in KRA’s 8th Corporate Plan. Some of these strategies include: Tax Base Expansion (TBE) which led to the recruitment of 1,247,543 additional taxpayers and the collection,” KRA says.
KRA says through the tax amnesty programme, it collected Ksh43.9 billion. This is after 2,617,111 taxpayers were granted amnesty in the Financial Year 2023/2024.
The taxman says 883 cases were reported through the iWhistle system, leading to the recovery of Ksh4.22 billion.
“During the same period, 255 staff were investigated, 41 lifestyle audits were conducted, and 2,100 background checks were completed,” KRA added.
“KRA collected Ksh103.390 billion in FY 2023/2024 from the debt programme. This performance is attributable to follow-ups on demand notices and the debt instalment plans agreed upon with taxpayers.”
Also, the taxman says as of June 30, 2024, 8,046,029 taxpayers filed their annual returns, a 26 per cent growth compared to the 6,385,523 taxpayers who filed their returns last year.