Home Business KRA tax collection up 6.7pc to Ksh 2.17T, but below target

KRA tax collection up 6.7pc to Ksh 2.17T, but below target

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The Kenya Revenue Authority (KRA) has said it collected Ksh 2.17 trillion in a year to June 30, 2023, which is a 6.7pc growth from Ksh 2.031 trillion it collected in the previous fiscal year.

While year-on-year tax receipts grew by Ksh 135 billion, the authority still came short of its revenue collection target of Ksh 2.2 trillion.

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According to KRA Acting Commissioner General Rispah Simiyu, the revenue performance was impacted by the domestic economy which contracted to 4.8pc as a result of drought witnessed in the better part of last year and the raging Russia-Ukraine which continues to disrupt commodity supply chain.

“The revenue collection signifies a performance rate of 95.3pc against the target. This is the second year in a row that KRA has surpassed the two trillion mark,” said Simiyu.

During the year under review, domestic tax collection grew by 8.5pc to Ksh 1.407 trillion against a target of Ksh 1.481 trillion, which translates to a performance rate of 95pc.

On the other hand, customs revenue grew 3.5pc to reach Ksh 754.1 billion, a performance rate of 95.6pc.

“Despite overall import values increasing by 15.3pc, customs taxes performance was in part affected by growth in exemptions and remissions, which grew by 39.7pc, driven by special exemptions accorded to rice, maize, sugar, and cooking oil,” she stated.

According to the authority, the special exemptions on the products which were part of the government’s strategies to mitigate against adverse effects of drought and to reduce the cost of living accounted for 24.8pc of exemptions accorded in the FY2022/2023.

Collection from excise on betting which was charged at the rate of 7.5pc in the last financial year grew 116.2pc to Ksh 6.6 billion against a target of Ksh 5.72 billion.

“The performance is attributed to the integration of the betting companies into the KRA tax system. The integration has streamlined tax remittance from the sector and scaled up revenue collection,” added Simiyu.

Domestic Value Added Tax (VAT) collection grew 11.3pc to Ksh 272.45 billion while corporation tax increased 9pc to Ksh 263.82 billion on account of  increased remittance from among others sectors, finance and insurance, ICT, manufacturing, wholesale and retail trade, and energy. The sectors contributed 77.8pc of the corporation taxes, KRA said.

Pay As You Earn (P.A.Y.E): P.A.Y.E registered a growth of 7.2pc with a collection of Ksh 494.98 billion during the fiscal year.

KRA says its tax base expansion efforts during the period resulted to additional revenue amounting to Ksh 14.65 billion.

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