KRA collections declined by 22pc in November

Kenya Revenue Authority (KRA) tax collections across the month of November have declined by 22.1 per cent to Ksh.101.4 billion.

This is in contrast to Ksh.130.1 billion in collections at the same time last year according to data from the latest National Treasury statement of actual revenues and net exchequer issues published on Friday.

The slump is representative of the ongoing government strife to raise revenues against the persistent economic slump occasioned by the COVID-19 pandemic.

Cumulatively, KRA has collected a combined Ksh.527.7 billion in tax revenues in the present 2020/21 financial year in contrast to Ksh.628.5 billion at the same time last year.

The tax man has however found respite in growing non-tax streams which presently sit higher at Ksh.37 billion in comparison to Ksh.34.1 billion in November 2019.

A combination of a depressed economic environment along with tax relief measures on key government income heads such as pay as you earn (PAYE) and corporation tax continue to dwindle KRA’s collections.

Nevertheless, the tax man is scheduled for the reinstatement of some of its tax heads should the Tax Laws (Amendment) [No.2], Bill 2020 be adopted by Parliament next week.

The bill which carry’s the exchequer’s planned tax reversal seeks to reinstate pre-COVID-19 level tax rates including PAYE at a higher rate of 30 per cent from 25 per cent and a corporation tax adjustment by a similar margin.

Additionally, the rate of value added tax (VAT) is expected to be reinstated to 16 per cent from the current discount of 14 per cent.

According to the National Treasury, the tax relief measures have cost government Ksh.65 billion in the form of lost revenues since their implementation in April this year.

KRA will be striving to get revenue growth back on track and in line with targets of cumulatively raising Ksh.1.567 trillion by June 30, 2021.