Home ECONOMY KRA collections hit new high of KSh 1.669 trillion

KRA collections hit new high of KSh 1.669 trillion

by biasharadigest

Kenya Revenue Authority(KRA) tax collections in the just ended 2020/21 financial year reached a new record of KSh 1.669 Trillion compared to KSh 1.607 Trillion the previous year.

As reflected in the 2021 budget policy statement, the revenue target was KSh 1.652 Trillion, which KRA surpassed with a KSh 16.8 billion surplus. This means that the Authority has surpassed its revenue targets for the first time since the 2013/14 financial year, some eight years ago.

In a statement, the Authority said this is a performance rate of 101% and revenue growth of 3.9% compared to the 2019/2020 financial year.

KRA has doubled its collections over the past 10 years

Available data also indicates that revenue collection has more than doubled in the last ten years from KSh 707 billion in 2011/12 to KSh 1.669 Trillion in 2020/21 financial year, representing a growth of 136%.

Exchequer revenue collections grew by 2.3% to KSh 1.544 Trillion in 2020/21 compared to KSh 1.510 Trillion collected in 2019/20, representing a performance rate of 100.9% against a target of KSh 1.530 Trillion.

The performance of KSh 1,544 Trillion is before accounting for KSh 18.5 Billion that Treasury says it will use to compensate hard-hit taxpayers.

Customs and Domestic Taxes Performance

The Domestic Taxes Department (DTD) collected KSh 1.039 Trillion during 2020/21, a 99.8% performance rate.
Customs and Border Control (C&BC) collected KSh 624.77 Billion, surpassing its target of KSh 606 Billion, a surplus of KSh 18.2 Billion and a 103% rate of performance.

Petroleum taxes amounted to KSh 226.680 Billion, a growth of 34.5% and a surplus of KSh 12.252 Billion against a target. In comparison, Non-Oil revenue recorded an increase of 16.4%, with collections amounting to KSh 398.089 Billion, which was above target by KSh5.996 Billion.

Corporation Tax recorded a growth of 3.7% in 2020/21 due to increased collections from the construction, energy and agriculture sectors. This is against a reduction in the corporate tax rate from 30% to 25% in H1.

The Pay as You Earn(PAYE) tax collected declined by 9.3% in the 2020/21 financial year due to measures by private firms to scale down due to COVID-19 pandemic effects.

A reduction in the top PAYE rate to 25% from 30% also affected the performance of this tax head and a 100% tax relief for persons earning below KSh 24 000 per month.

Withholding Tax recorded a growth of 3.8% in 2020/21 from 18.2 the prior year due to a depressed economy due to impact of the pandemic.

Domestic Excise recorded a growth of 12.0% compared to 6.4% the year prior due to the re-opening of the economy and extended opening hours for restaurants and bars.

Domestic VAT collections fell by 7.9% due to a decline in turnover of many firms affected by COVID-19 effects.

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

“The Authorities 8th Corporate Plan targets to collect KSh 6.831 trillion by the end of 2023/2024 financial year. With the support of taxpayers, the projected economic recovery of 6.6 % in 2021, progressive tax policy frameworks, and a robust tax compliance mechanism, KRA is confident that it will achieve this target and enable the country sustain its economy,” said Githii Mburu, KRA Commissioner-General.

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