The slow economic growth and slow rate of job creation have cost Treasury a 12 per cent shortfall in the targeted revenue from salaries in the first three months of the 2019/2020 financial year.
Reports from Business Daily on Tuesday, December 10, indicated that the country failed to raise the Ksh110 billion it had estimated, and instead collected Ksh98.1 billion from Pay as You Earn (PAYE) tax.
The reports also indicate that Treasury had projected to collect Ksh100 billion from incomes but KRA only managed Ksh82 billion, a factor that was attributed to the challenges facing the economy and high unemployment rate.
The difference between income tax and PAYE is that the former is a direct tax that is imposed on income derived from business, employment, rent, dividends, interests, pensions among others. PAYE is a method of collecting income tax.
The situation presented by KRA is in stark contrast to the promises made by the Jubilee government during the run-up to the 2017 polls.
President Uhuru Kenyatta and Deputy President William Ruto had pledged to create 1.3 million jobs every year till the end of their term in 2022.
In the party's manifesto released on 26 June 2017, President Kenyatta stated that if re-elected, his government would work with devolved governments to establish at least one industry in every county.
"We commit to creating at least 6.5 million jobs over five years to ensure our people, particularly our youth, can secure and maintain good jobs that enable them to enjoy a decent life. We will concentrate investments in the sectors that are growth-oriented and job-creating," Kenyatta had stated.
Reports, however, are painting a dire economic situation compounded by a debt crisis, intimating that for every Ksh100 collected from Kenyans, Ksh60 goes to the repayment of debt.
Other sectors affected by the shortfall in revenue targets in the current financial year include the Value Added Tax (VAT) on local goods, which missed the mark by Ksh6 billion while VAT on imported goods missed by Ksh8 billion.
Excise duty for the first quarter of the fiscal year was Ksh49 billion against a target of Ksh57 billion, while import duty was Ksh25 billion against a target of Ksh32 billion.
