KRA’s annual collection at Ksh.1.56 trillion, misses target by Ksh.16.8 billion
Published on: August 05, 2021 06:52 (EAT)
The Kenya Revenue Authority (KRA) came closest to hitting its annual tax target in the year ending June 2021 when it missed the mark by just Ksh.16.8 billion. According to new data from the National Treasury, KRA which is tasked with the collection of ordinary revenue raised Ksh.1.562 trillion in 12 months from July last year. This against a target of Ksh.1.579 trillion as per revised budget estimates covering the period to June this year. The collection represents a much improved 98.9 per cent performance by the tax man in the year bettering returns of 97.4 per cent a year prior. The improved tax collections are against the stay of the COVID-19 pandemic which battered the economy leading to low revenue remittances by enterprises and individuals. At the same time, collections through July to December 2020 were dented by government tax incentives which included reductions in pay as you earn (PAYE), VAT and corporation tax. Nevertheless, several tax heads beat the general slack to register growth including import duty (6%), PAYE (2.3%) and VAT (7.7%). On the flipside, excise taxes slid by 1.7 per cent, corporation tax fell by 5.3 per cent while non-tax revenues tumbled by 25.8 per cent to Ksh.132.5 billion. Tax collection was worst hit between the months of November and January with the deficit sitting at 16.7 per cent in November. The recovery seen in latter months has been attributed to the reversal of tax relief measures in January 2021 and new tax measures from the 2020 Finance Act including the digital services tax which came into effect at the start of the year. Cumulatively, total revenue including appropriations from ministries stood at Ksh.1.738 trillion, falling shy of expectations by Ksh.99.5 billion. The ministerial appropriations stood at a poor Ksh.176.4 billion missing the prescribed target by Ksh.82.7 billion. Total expenditure and net lending meanwhile rounded off at Ksh.2.755 trillion against a target of Ksh.2.887 trillion living behind a fiscal deficit of 7.8 per cent of GDP, the same as the prior year. The National Treasury now projects a fiscal deficit of 7.5 per cent in the current financial year and which is projected to close out at a lower 3.6 per cent in June 2025. Curiously, the exchequer ministry’s data shows the Kenyan economy expanded by 9.5 per cent in value terms over the 12 months with GDP estimated at Ksh.11.169 trillion. KRA is tasked with collecting Ksh.1.776 trillion in the current financial year with total revenues projected at Ksh.2.034 trillion.