Kenya Revenue Authority (KRA) has revealed that its revenue collection from taxpayers grew significantly by 6.7 per cent in the 2022-2023 financial year to stand at Sh2.166 trillion.
KRA said its collected revenues spiked from Sh2.031 trillion posted in the last financial year despite Kenya experiencing an economic slump due to a tough global fiscal environment.
The taxman noted that the revenue performance was hampered by the sluggish economic growth domestically which decreased from 7.6 percent in 2021 to 4.8 percent in 2022.
KRA blames the stunted economic growth on the adverse effects of multiple shocks among them a prolonged drought and the Russia Ukraine conflict that disrupted the supply chain.
In a statement, KRA said the collected revenue marked a 95.3 per cent performance rate against its target, making the second consecutive year it surpassed the two trillion mark.
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Its exchequer revenue increased by 6.9 per cent to Sh2.030 trillion compared to Sh1.9 trillion which was collected in the previous financial year.
Exchequer revenue consists of all mainstream Government revenues including Taxes on International Trade and Transactions, Excise taxes, Taxes on Income, Profits and Capital gains, Taxes on goods and services, and Property taxes.
KRA is also mandated to collect revenue on behalf of other government agencies at entry ports including Road Maintenance Levy, Air Passenger Service Charge, Aviation Revenue, and Petroleum Development Fund.
During the fiscal year ending June 30, 2023, the taxman collected Sh136.390 billion on behalf of the agencies marking a of 3.7 per cent growth compared to the last financial year.
In the said period, revenue from Domestic Taxes grew by 8.5 per cent to Sh1.407 trillion against a Sh1.481 trillion target, as customs taxes grew by 3.5 per cent to Sh754.09 billion.
Excise on Betting grew by 30 per cent to Sh6.64 billion compared to a similar period during the 2021-2022 financial year due to integration of the betting firms into the KRA tax system.
Domestic VAT collection grew by 11.3 per cent to Sh272.452 billion after KRA adopted the Tax Invoice Management System (TIMS) that improved compliance among VAT registered taxpayers.
KRA collected Sh263.819 billion from Corporation Tax marking a 9 per cent growth, largely driven by improved remittances from Finance & Insurance; Information & Communication; Manufacturing; Wholesale & Retail Trade; and Electricity, Oil, & Gas sectors.
Pay As You Earn (P.A.Y.E) grew by 7.2 per cent to Sh494.979 billion, while Domestic Excise grew by 2.8 per cent to Sh68.124 billion on the back of revenue from Cosmetics (60.6 per cent growth); Wines and Spirits (8.7 per cent); Bottled Water (4.4 per cent growth); Soft Drinks (8.0 per cent growth); Beer (0.4 per cent growth); and Tobacco (2.8 per cent growth).
Digital Service Tax and VAT on Digital Market Supply attracted to KRA Sh5.328 billion, marking a growth of 207.9 per cent compared to the same period in previous financial year.
KRA netted Sh99.272 billion from its enhanced debt collection programmes targeting non-compliant taxpayers including follow-ups on demand notices and debt instalment plans.
Its enhanced Dispute Resolution Framework collected Sh71.836 billion from 7,458 resolved cases from Litigation, Alternative Dispute Resolution (ADR) and Tax Appeals Tribunal (TAT).
KRA targets to collect Sh2.768 trillion in FY 2023-2024 to surpass the Sh3 trillion mark by the end of the FY 2024-2025 to fund the government’s Bottom-Up Economic Transformation Agenda (BETA).
The authority says it will achieve this through both tax administrative measures and tax policy reforms and simplify tax collection services while also expanding its tax base.
KRA says the program enabled it to net Sh14.649 billion more revenue with a total of 940,483 additional active taxpayers being recruited during the period under review.
