The Kenya Revenue Authority (KRA) has reported 11.1pc increase in tax collection to Ksh 2.41 trillion for the financial year 2023/24.
Though this was an improvement compared to Ksh 2.17 trillion collected in the previous year, the taxman missed the target as it managed to collect 95.5pc of projected revenues.
“The year under review was characterized by multiple economic shocks that included depreciation of the Kenya Shilling against the US Dollar, rising bank lending rates and international conflicts that disrupted supply chains, among others. These factors affected revenue mobilization efforts,” said Humphrey Wattanga, KRA Commissioner General.
According to the authority, the Exchequer revenue grew by 9.5pc to Ksh 2.22 trillion from Ksh 2.03 trillion collected in the previous financial year translating to a collection performance rate of 95.8pc.
Domestic taxes grew 14.4pc to Ksh 1.61 trillion against a target of Ksh 1.68 trillion while customs revenue hit Ksh 791.37 billion after growing by 4.9pc.
“Despite overall import values increasing by 11.7pc, oil and non-oil taxes performance were in part affected by growth in exemption and remissions, which grew by 23.8pc, driven by special exemptions accorded to some food commodities. These products account for 40.8pc of exemptions accorded in the FY 2022/2023,” added Wattanga.
Value Added Tax (VAT) collection beat target by Ksh 6.33 billion with a collection of Ksh 314.16 billion which grew by 15.3pc when compared to last year.
KRA attributes increase in domestic VAT collection to the implementation of the Electronic Tax Invoice Management System (eTIMS), which has enhanced compliance among VAT registered taxpayers.
With the introduction of eTIMS which also targets small enterprises, average monthly collection growth rose to 17.5pc.
In the second half of the year to June 30, 2024 when eTIMS was introduced, the monthly average collection stood at Ksh 26.25 billion against the monthly average collection of Ksh 23.6 billion collected in the first half of before rollout of eTIMS.
Capital Gains Tax grew 49.5pc to Ksh 8.38 billion while Corporation tax grew by 4.9pc to Ksh 278.16 billion on account of increased remittances from sectors like wholesale and
retail trade which grew 10pc, electricity, oil, and gas 11pc, transport and storage 118.5pc, accommodation and food service 96.6pc and education 29.5pc.
On the other hand, Pay As You Earn (P.A.YE) grew 9.7pc to Ksh 543.19 billion while excise tax increased by 8.1pc to Ksh 73.62 billion.
Non-oil customs revenue also reported a growth of 1.9pc during the year under review to Ksh 490.6 billion while taxes from imported oil surged by 10.3pc to Ksh 300.77 billion.
