KRA in tough race to collect Sh535bn in two months

Times Tower

Times Tower, Kenya Revenue Authority headquarters in Nairobi.

Photo credit: File I Nation Media Group

The Treasury is under pressure to collect at least Sh535 billion in taxes in the remaining two months to the end of the 2022/23 financial year, as the Kenya Revenue Authority (KRA) collected just Sh1.57 trillion in taxes by the end of April.

This will be a hard task for the taxman, since the Sh535 billion it has to collect to hit the Sh2.1 trillion target as contained in the budget, is 70 per cent higher than the average collection over the 10 months to April.

This means that KRA has less than 50 days to collect the Sh535.1 billion deficit, which could prove a difficult task as the highest amount the taxman has been able to collect in a single month was Sh194 billion in December 2022.

According to data released by the Treasury, the KRA started the current fiscal year on a low note with Sh130.6 billion collected in July, which continues to be the lowest monthly total for the fiscal year 2022/2023.

In the following months, the taxman collected Sh149.62 billion in August, Sh184.94 billion in September, Sh142.75 billion in October, and Sh150.63 billion in November.

“Conscious of the mandate to mobilise and secure revenue for national development, KRA remains committed to bridging the deficit on target,” KRA said last month in a statement.

Due to heightened economic activity brought on by the holiday season, revenue collection peaked in December at Sh194.05 billion before falling to Sh152.13 billion in January.

After dropping to Sh131.4 billion in February due to a spike in inflation to 9.2 percent, which slowed down consumption, the collection increased to Sh157.17 billion in March.

The KRA has had a poor revenue performance during the current financial year, occasioning a delay in payment of salaries to civil servants in March, with the government blaming public debt service pressures on the delays.

This is despite an impressive revenue performance last year, where it collected Sh2.03 trillion, surpassing its targets for the first time in about a decade.

“We are not going to borrow money to pay salaries,” said President William Ruto last month, in response to concerns by civil servants who had not been paid by Easter holiday.

County governments have also suffered after the Treasury failed to release funds, to an extent the Council of Governors threatened in April to shut down before the Treasury intervened with a partial release of the funds.

The devolved units reported being owed Sh122.1 billion as of the end of March, and governors blamed the withheld funds for the inability to pay salaries.

Since his election, President Ruto has made several changes at the KRA, including the exit of commissioner-general Githii Mburu, while Anthony Mwaura has also been brought in as chairman.