KRA Collects KES2Bn as it reaches 6.7pc of its Target

The Kenya Revenue Authority (KRA) has demonstrated mixed progress in its revenue collection efforts through early 2025.

In its extended tax amnesty program running from December 27, 2024 to June 2025, KRA has collected Sh2 billion in January 2025, reaching 6.7 percent of its Sh30 billion target.

This initiative offers waivers on interest, penalties, and fines for tax debt periods up to December 31, 2023, and follows a successful first phase that ran from September 2023 to June 2024, which collected Sh50.5 billion and waived Sh200 billion in penalties.

The new amnesty program’s target was informed by the previous phase’s success, which attracted over 1.06 million applicants with principal tax arrears of Sh54.50 billion, according to KRA Chairman Ndiritu Muriithi.

To increase accessibility,the program allows taxpayers unable to make one-off payments to propose payment plans for outstanding principal taxes, provided they are settled by June 30, 2025.

Despite challenging economic conditions, the KRA’s overall performance shows improvement, with total collections increasing by 4.5% to Sh1.243 trillion by December 31, 2024, compared to Sh1.189 trillion in the same period the previous year.

This revenue comprised Sh1.12 trillion in Exchequer revenue and Sh122.872 billion in agency revenue, with the latter exceeding its target by 21.3%.

The growth is particularly notable given significant economic headwinds, including a GDP slowdown to 4% in Q3 2024 from 6.1% in Q3 2023, weakening domestic demand evidenced by a 49.2-point average PMI, and a 0.6% decline in import values.

Nevertheless, customs revenue grew by 4.8% to Sh429.127 billion, while domestic taxes increased by 4.4% to Sh811.847 billion.

The KRA attributes these improvements to enhanced tax compliance measures and ongoing reforms, though government austerity measures continue to impact VATable sectors.