NAIROBI, Kenya, Oct 12 – Kenya’s tax revenue collections rose 14.85 per cent to Sh258.31 billion in September, offering a boost to government revenue mobilization even as the Treasury faces pressure to meet its annual targets and finance rising expenditure.
The National Treasury’s September fiscal outturn update shows the government continued to rely on borrowing and external financing to support its spending obligations during the third month of the 2026/27 financial year.
Domestic borrowing amounted to Sh101.72 billion, while external loans and grants contributed Sh54.05 billion.
Non-tax revenue stood at Sh13.95 billion, with other domestic financing contributing Sh364.39 million.
The September tax collection formed part of a broader recovery in revenue performance during the first quarter.
Treasury data published for the three months to September showed ordinary revenue, comprising tax and non-tax receipts, increased by 14.4 per cent to Sh655.8 billion from Sh573.5 billion in the corresponding period last year.
“Tax revenue collected: KSh258.31 billion, up 14.85%,” the Treasury update states.
“Public Debt Service: KSh109.66 billion,” the statement adds.
Despite the growth, the Kenya Revenue Authority recorded a Sh58.2 billion shortfall against its ordinary revenue target in the first quarter, highlighting the challenge of translating stronger collections into sufficient funding for the national budget.
Income tax accounted for the largest shortfall, with collections of Sh297.9 billion against a target of Sh323.3 billion.
Excise duty receipts were also Sh16.3 billion below target, while import duty was the only major tax category to exceed its collection target.
On expenditure, the Treasury’s September update reported Sh140.25 billion in recurrent spending and Sh60.22 billion in development expenditure.
Public debt service amounted to Sh109.66 billion, while county governments received Sh40.66 billion through the equitable share.
The figures underline the competing demands on public finances, with the government required to fund essential services and development projects while meeting its debt obligations.
Kenya has set an annual tax revenue target of approximately Sh2.86 trillion for the 2026/27 financial year, although the Treasury has revised some revenue projections amid slower economic growth.
The September performance will therefore be measured not only by the annual growth in collections but also by whether the taxman can close the gap against budget targets without further increasing pressure on borrowing.
