KRA collections hit Sh1.499 trillion on improved tax mobilisation

Treasury Principal Secretary Dr. Chris Kiptoo, announced this achievement during a parliamentary meeting with the National Assembly Departmental Committee on Finance and National Planning concerning the processing of the 2024 budget policy statement.

Dr. Kiptoo expressed optimism for further improvement in revenue performance throughout the fiscal year, attributing this to enhanced tax administration.

Trade Principal Secretary Chris Kiptoo. (Twitter) Pulse Live Kenya

He highlighted the government's strategic plan to foster economic transformation for shared growth, emphasizing the formulation, implementation, and monitoring of prudent economic and financial policies at both national and county government levels.

The government's efforts include creating a conducive environment for business by ensuring low and stable inflation and interest rates, stable exchange rates, and improved mobilisation and management of external resources.

Moreover, the government plans to efficiently manage public debt, optimize cash management, effectively administer the government's financial system, and enforce proper management, control, and accounting of public funds.

Dr. Kiptoo also mentioned the commitment to providing independent, objective assessments of the soundness of risk management strategies and practices, as well as management control frameworks, systems, and practices.

Looking ahead, the government under the Bottom-Up Economic Transformation Agenda (BETA) plans to scale up efforts on policy and structural reforms to navigate global turbulence, accelerate economic recovery, and address overarching development challenges such as job creation, poverty eradication, and climate change mitigation.

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The implementation of the Medium-Term Revenue Strategy (MTRS) is expected to strengthen tax revenue mobilization efforts to over 20 percent of GDP over the Medium Term.

KRA is set to enhance its tax administration through the advanced use of technology to seal leakages, including enhancements of iTax and the Integrated Customs Management System (iCMS), and usage of the Tax Invoice Management System (e-TIMS).

For the 2024/2025 budget, revenue collection, including Appropriation-in-Aid, is projected at Sh3.435 trillion (19.1 percent of GDP), with ordinary revenue projected at Sh2.948 trillion (16.4 percent of GDP).

KRA headquarters in Times Towers Nairobi KRA headquarters in Times Towers Nairobi Pulse Live Kenya

The total expenditure is projected at Sh4.188 trillion (23.2 percent of GDP), resulting in a fiscal deficit of Sh703.9 billion (3.9 percent of GDP), which will be financed by a combination of net external and domestic financing.

Despite the impressive growth, the Kenya Revenue Authority faced challenges in the previous fiscal year, including missing its revenue target by Sh79 billion in the first quarter of the fiscal year 2023/2024.

This was primarily due to non-payment of Pay As You Earn (PAYE) by the public sector and a significant decline in the Information and Communication Technology (ICT) sector's instalment remittances.

However, the KRA has been on an upward trajectory in revenue collection over the past years, with collections progressively increasing from Sh1.58 Trillion in FY2018/2019 to Sh2.166 Trillion in FY2022/23.

This growth is part of a broader strategy to enhance tax policy reforms, with the KRA banking on these reforms to collect Sh2.768 trillion by the end of the current financial year and surpass the Sh3 trillion mark by the next financial year 2024/25.

KRA-Signage KRA-Signage Pulse Live Kenya

The KRA's strategic efforts, including the integration of betting companies into the tax system and the implementation of the Tax Invoice Management System (TIMS), have significantly boosted revenue collection from key tax heads like Excise on Betting, Domestic VAT, Corporation Tax, PAYE, and Domestic Excise.

These measures reflect the KRA's commitment to achieving its ambitious target for the fiscal year 2023/24, despite the challenging economic environment and the need for continued vigilance and innovation in tax collection methods to support Kenya's economic transformation and development goals.