NAIROBI, Kenya July 7 – Kenya Revenue Authority (KRA) has for the first time in Kenya’s history hit and surpassed the Sh2trillion revenue collection mark, defying the difficult economic environment brought about by Covid-19.
Revenue collection in the financial year 2021/22, which ended on June 30, reached a new record of Sh2.031trillion growth compared to Sh1.669 trillion collected in the financial year 2020/21.
The Authority surpassed the original target of Sh1.882 trillion and two other upward revenue target revisions of Sh1.911 Trillion, which was later revised to Sh1.976 Trillion.
“This is the first time the Authority has surpassed its original target in 14 years (since FY 2007/08), after the previous target revisions were adjusted downwards,” KRA Commissioner General, Githii Mburu said in a statement.
The performance represents a performance rate of 102.8 per cent against the revised target and revenue growth of 21.7 per cent compared to the last financial year.
Revenue collection has just about tripled in the last 11 years from Sh707.36 Billion in FY2011/12 representing a growth of 187.1 per cent.
KRA is also mandated to collect revenue on behalf of other government agencies mainly at the ports of entry. These include Road Maintenance Levy, Airport Revenue, Aviation Revenue, and Petroleum Development Fund amongst other levies.
During the financial year ending June 30, KRA collected Sh131.479billion on behalf of the agencies reflecting a growth of 5.1 per cent compared to the last financial year.
The exchequer, which is the money collected on behalf of the National Government, grew by 23.0 per cent.
This is after KRA collected Sh1.899trillion compared to Sh1.544trillion collected in the previous financial year. This translates to a performance rate of 103.3 per cent against the target.
During the fiscal year, domestic taxes collected Sh1.297trillion against a target of Sh1.267trillion.
Customs and Border Control sustained excellent performance with a collection of Sh728.530billion against the set target of Sh702.823 Billion.
Non-petroleum taxes grew by 20.7 per cent while petroleum taxes recorded a 9.4 per cent growth.
Non-oil taxes collections amounted to Sh480.540billion against a target of Sh446.516billion registering a surplus of Sh34.024billion while petroleum taxes amounted to Sh247.990billion reflecting a performance rate of 96.8 per cent.
Corporation tax collection stood at Sh242.018billion against a target of Sh218.161billion.
“The performance was driven by increased remittance from key sectors like, Finance and Insurance, Manufacturing, Wholesale and Retail Trade, and Transport and Storage sectors,” said Mburu.
Pay As You Earn (P.A.YE) registered a collection of Sh461.815billion against a target of Sh455.129billion.
The performance was mainly driven by the gradual recovery of the job market emanating from economic recovery.
Domestic VAT collections amounted to Sh244.693billion reflecting a growth of 24.0 per cent.
The performance was primarily attributable to enhanced compliance efforts by KRA and the economic recovery.
The domestic excise tax head recorded a growth of 6.2 per cent in FY 2021/22, with a collection of Sh66.529billion.
“The performance turnaround is attributed to stringent enforcement against tax evasion focusing of curbing illicit trade and blatant non-compliance with tax laws by the players in the alcoholic and cigarettes sectors,” said Mburu.
KRA’s stellar revenue performance is attributed to the implementation of key strategies in its 8th Corporate Plan, tax policy measures and enhanced revenue administration.
Some of the strategies in the corporate plan include enhanced active surveillance and enforcement operations that have been reinforced by collaboration with the multi-agency team under the whole of Government approach in the fight against economic crimes.
To support the fight against economic crimes, KRA has also partnered with other jurisdictions globally to exchange tax information.
Kenya’s Exchange of Information (EOI) steadily increased from 73 in 2020 to 173 in 2021. Kenya also recovered Sh10.5million in 2020 and Sh985.2million in 2021.
Tax policy measures have also contributed to positive tax growth during the 2021/2022 financial year.
For example, Voluntary Tax Disclosure Program (VTDP) has immensely contributed to increased revenue collection.
VTDP allows a taxpayer to disclose to the KRA tax liabilities that were previously undeclared and enjoy full or partial relief of penalties and interest on the tax disclosed.
Under the program, Sh8.546billion in taxes was collected from 17,038 applications in the fiscal year. A total of Sh9.562 Billion was applied for disclosure and waivers.
