The Kenya Revenue Authority (KRA) has demonstrated a robust performance in the first quarter of the financial year 2023/2024, recording a significant revenue collection growth of 8.4 per cent.

This achievement marks a commendable milestone for the tax agency, as it managed to collect Sh586.9 billion from July to September 2023, in comparison to the Sh541.6 billion collected during the same period last year.

According to KRA, the exceptional growth in revenue collection can be attributed to a series of strategic measures it implemented.

One notable factor has been the real-time collection of taxes, which has led to a remarkable 67 per cent increase in withholding tax and excise duty from betting and gaming companies compared to the previous financial year.

Furthermore, the launch of a tax amnesty program initiated on 1st September 2023, has proven to be a significant contributor, resulting in the collection of Sh3.4 billion to date.

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The introduction of the electronic Tax Invoice Management System (eTims) has also played a pivotal role in the positive trajectory of revenue collection.

Prior to its implementation, the monthly average collection of Value Added Tax (VAT) stood at Sh21 billion.

Currently, KRA is collecting Sh26 billion per month, representing a substantial growth of 23.8 per cent.

The KRA foresees an annual collection of Sh312 billion by the conclusion of FY 2023/2024.

Despite these impressive figures, the KRA fell short of its quarter-one target, which was set at Sh665.9 billion, resulting in a deficit of Sh79.0 billion.

Several factors contributed to this shortfall, including inadequate remittance of Pay-As-You-Earn (PAYE) taxes by the public sector, a significant decline of 20.7 per cent in instalment remittances from the Information and Communication Technology sector, and an unfavourable economic climate.

Commissioner General of KRA, Humphrey Wattanga Mulongo, emphasized the challenges faced by the Authority, stating, "The allocated Recurrent Funding plus our expected ALA in the year total to Sh28.117 billion, which is insufficient to support even the current operations, i.e., staff costs, existing contracted services, and other revenue operational costs up to the end of the financial year."

Despite these challenges, the KRA remains steadfast in its commitment to achieving the ambitious target for FY 2023/2024, which stands at Sh2.768 trillion.

This goal necessitates a formidable growth rate of 27.8 per cent compared to the Sh2.166 trillion collected in the previous fiscal year.

In particular, the focus will now shift to the second quarter, with the KRA aiming to build on this quarter's success to meet the overarching revenue target for the year.