Home GENERAL NEWS KRA defies pandemic odds to surpass its target collection for the first time in 8 years

KRA defies pandemic odds to surpass its target collection for the first time in 8 years

by biasharadigest

NAIROBI, Kenya, Jul 3- The Kenya Revenue Authority has filed a record Sh1.7 trillion revenue collection in the 2020/2021 financial year surpassing the Sh1.6 trillion it collected in 2019/2020.

KRA Commissioner Githii Mburu through a statement said the taxman surpassed its target collection for the first time in 8 years, by Sh16.08 billion from a target of Sh1.65 trillion as was stated in the 2021 Budget Policy Statement.

“The FY 2020/2021 revenue target as reflected in the 2021 Budget Policy Statement was Sh1.652 trillion which KRA surpassed with a surplus of Sh16.808 billion. This represents a performance rate of 101percent and revenue growth of 3.9percent compared to the last Financial Year. This performance is consistent with the prevailing economic indicators, especially the projected GDP growth of 0.6percent in 2020,” said Mburu.

Collections from domestic excise posted a growth of 12 percent year-year, compared to a decline of 6.4 percent, recorded in the last financial year, supported by the gradual reopening of the economy and extended operating hours for bars and restaurants.

Domestic VAT performance however recorded a decline of 7.9 percent, primarily affected by the COVID-19 pandemic, which saw business turnovers decline.

The decline was also affected by the reduction of the VAT rate from 16 to 14percent.

At the same time, withholding tax recorded a growth of 3.8percent in FY 2020/21, which is a drop from average growth of 18.2percent recorded last year.

The performance was negatively impacted by depressed economic growth due to the impact of the Covid-19 pandemic, the taxman said without disclosing the exact figures.

Corporation tax grew by 3. 7 percent, with key sectors meeting or exceeding their targets.

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Energy, Agriculture, and construction sectors for example posted a growth of 222.7, 33.1% and 31.9percent respectively.

Payroll taxes, however, experienced a decline of 9.3 percent with the depressed performance attributed to a reduction in the employment rate emanating from measures taken by mainly private firms to reduce operating costs as a result of the Covid-19 pandemic.

“The tax head was also affected by the reduction of the top PAYE rate from 30 to 25 and a 100percent tax relief for persons earning below Sh24, 000 per month,” added Mburu.

Besides a tough business environment occasioned by the adverse impact of the outbreak of coronavirus disease, KRA tax collection boost has further been attributed to the implementation of several revenue enhancement measures such as nabbing tax cheats.

Adjustments made in order to widen its tax base through the Digital Services Tax, Minimum Tax, and Voluntary Tax Disclosure saw active taxpayers rise from 3.94 million to 6.1 million, further boosted revenue collection in years.

Consequently, the introduction of Alternative Dispute Resolution (ADR) that ensured, faster, objective and efficient resolution of tax disputes, KRA unlocked Sh31.435 billion in taxes out of 552 cases resolved in the financial year.

Under the 2021/2022 fiscal year, KRA is expected to collect at least Sh1.8 trillion in the new up from a target of Sh1.6 trillion last year.


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