steven maseka 
- KRA Records 11.1% growth in Revenue Collection;
KRA Records Kshs. 240 Billion Growth in Revenue Collection. Despite a challenging economic environment, KRA collected Kshs. 2.407 Trillion for the Financial Year 2023/2024, compared to Kshs. 2.166 Trillion last year. This represents a growth of 11.1% and a performance rate of 95.5%.
Factors Affecting Revenue Growth
The year faced economic shocks like shilling depreciation, rising bank lending rates, and international conflicts disrupting supply chains, impacting revenue mobilization efforts.
KRA collects Exchequer and Agency revenues. Exchequer revenue is for the National Treasury, while Agency revenue is collected for other government agencies, including Road Maintenance Levy, Air Passenger Service Charge, Petroleum Development Fund, and Housing Levy.
Exchequer revenue grew by 9.5% after collection of Kshs. 2.223 Trillion, with a performance rate of 95.8%. Agency revenues amounted to 184.036 Billion, reflecting a growth of 34.9%.
Customs & Domestic Taxes Performance
Domestic Taxes registered a 14.4% revenue growth, collecting Kshs. 1.611 Trillion against a target of Kshs. 1.677 Trillion, a performance rate of 96.1%. Customs collected Kshs. 791.368 Billion, a 4.9% growth.
Customs performance was affected by exemptions on certain food commodities and low consumption of petroleum products, with exemptions growing by 23.8%.
Performance of Key Tax Heads
1.Domestic VAT:collection stood at Kshs. 314.157 Billion against a target of Kshs. 307.823 Billion, reflecting a 15.3% growth. The growth is attributed to the implementation of the Electronic Tax Invoice Management System (eTIMS). Domestic VAT average monthly collection stood at Kshs. 23.559 Billion in the first half of FY 2022/23, before increasing to monthly average of Kshs. 26.250 Billion in the second half of FY 2022/23 when eTIMS rollout was scaled up.Currently, monthly average domestic VAT collections stand at Kshs. 28.680 Billion in FY 2023/24.
2. Domestic Excise:grew by 8.1%, collecting Kshs. 73.624 Billion, with strong performance from manufacturers of soft drinks, bottled water, beer, and tobacco.
3. Capital Gains Tax: Registered a 49.5% growth, collecting Kshs. 8.381 Billion against a target of Kshs. 7.710 Billion, a performance rate of 108.7%. Corporation tax grew by 4.9%, collecting Kshs. 278.156 Billion.
4. Corporation Tax: Corporation tax performed at 93.4% with a collection of Kshs. 278.156 Billion. This is a growth of 4.9% over the last financial year.
5.P.A.Y.E grew by 9.7%, collecting Kshs. 543.186 Billion, driven by remittances from private firms and the public sector.
6. Customs Revenue: Non-oil taxes recorded a growth of 1.9% after collecting Kshs.490.60 Billion.On the other hand, Oil taxes grew by 10.3% after collecting Kshs. 300.77 Billion.
Key Revenue Drivers
The revenue growth is attributed to the implementation of key strategies as enshrined in KRA’s 8th Corporate Plan. Some of these strategies include:
a) Tax Base Expansion (TBE)
TBE initiatives led to the recruitment of 1,247,543 additional taxpayers and the collection of Kshs. 24.62 Billion. Some of the initiatives under the TBE include the recruitment of landlords under the Monthly Rental Income (MRI) programme.
b) Tax at Source
i) Electronic Tax Invoice Management System (eTIMS) which has minimized VAT fraud and increased tax revenue.
ii) Integration of Betting and Gaming Companies The sector registered a growth rate of 26.2% after KRA collected Kshs. 24.269 Billion in FY 2023/24 compared to Kshs. 19.224 Billion in the previous year from Excise on Betting Services, Withholding tax on winnings from betting and gaming, and Betting tax.
c) Tax Amnesty
Through the tax amnesty program, KRA collected Kshs. 43.9 Billion.This is after 2,617,111 taxpayers were granted amnesty in the Financial Year 2023/2024.
d) Dispute Resolution Framework
The framework enhanced revenue collection from Litigation, Alternative Dispute Resolution (ADR), and Tax Appeals Tribunal (TAT). This enabled KRA to collect Kshs. 21.9 Billion from 1,184 concluded cases.
e) Anti-Corruption
883 cases were reported through the iWhistle system.This led to the recovery of Kshs. 4.22 Billion.During the same period, 255 staff were investigated, 41 lifestyle audits were conducted, and 2,100 background checks were completed.
f) Debt Programme
KRA collected Kshs. 103.390 Billion in FY 2023/2024 from the debt programme.This performance is attributable to follow-ups on demand notices and the debt installment plans agreed upon with taxpayers.
Filing of 2023 returns
As at 30th June 2024, 8,046,029 taxpayers filed their annual returns. This represents a growth of 26% compared to the 6,385,523 taxpayers who filed their returns last year.
Conclusion;
To enhance revenue mobilization, KRA will implement the 9th Corporate Plan, focusing on compliance, process simplification, tax base expansion, infrastructure scaling, data management, and optimizing human resources.
Thank you to all compliant taxpayers for honoring their tax obligations and their contribution toward furthering Kenya’s economic sustainability through registration, filing, accurate reporting, and payment of taxes.
