The Kenya Revenue Authority (KRA) has collected nearly 60 percent of its full-year tax target in seven months through January on the back of economic recovery from Covid shocks and fresh taxation measures, Treasury data show.
Collections for seven months of the current financial year ending June crossed the Sh1 trillion mark in the review period for the first time, according to exchequer statistics released by Treasury Secretary Ukur Yatani last Friday.
Tax receipts between July 2021 and January 2022 amounted to Sh1.01 trillion, a 28.89 percent jump or Sh226.76 billion more compared with a similar period previously.
This means the taxman is ahead of its target on a prorated basis, having collected an average of Sh144.52 billion per month against a prorated goal of Sh142.29 billion partly because of the low base in the previous year.
The jump has largely benefitted from progressive economic recovery from the Covid-19 shocks on the economy, aggressive use of data by the taxman to catch cheats, and increased taxation which has raised the cost of basic commodities.
The collections were also helped by the removal of Covid tax reliefs for firms and workers, except those earning less than Sh24,000, which were in place between April and December 2020.
Tax experts have also attributed the performance on increased compliance after KRA extended a partial tax amnesty to businesses and individuals who have tax arrears dating five years back to pay up without incurring accumulated interest and penalties.
KRA Commissioner-General Githii Mburu last month cited “use of data and intelligence to unearth unpaid taxes” as well as “technology to simplify tax processes” as key drivers of revenue growth.
“The excellent revenue performance has been enhanced by the sustained implementation of key strategies as enshrined in KRA’s 8th Corporate Plan (strategic plan 2021-24),” Mr Mburu said in a statement on January 14.
Taxation streams such as Pay As You Earn, Value-Added Tax and excise duty outperformed targets in six months through last December.
However, corporation taxes, while posting year-on-year growth, have bucked this trend largely due to global supply chain constraints which have raised the cost of raw materials and shipping expenses for firms.