KRA Hits Record High in Tax Collection Despite Covid-19

  • Times Tower
    Times Tower, KRA headquarters in Nairobi
  • The Kenya Revenue Authority (KRA) has hit a new record high in the collection of tax despite the covid-19 pandemic which has seen multiple sectors of the economy shrink. 

    The authority amassed Ksh 1.607 trillion for the financial year 2019/2020 as compared to Ksh 1.580 trillion collected over the same period between July 2018 and July 2019.

    KRA thus collected Ksh 27 billion more, which translates to 97.9% performance rate and 1.7% revenue growth as compared to the 2018/2019 financial year. 

    Commissioner General, Githii Mburu, stated that taxman also collected Ksh 97.1 billion as Agency Fees.

    Treasury CS Ukur Yatani (right) poses for a photo at Treasury Headquarters, Nairobi on Thursday, June 11, 2020, ahead of Budget 2020/21 presentation

    "This is revenue collected on behalf of other government agencies mainly at the ports of entry. They include Road Maintenance Levy, Airport Revenue, Aviation Revenue, and Petroleum Development Fund amongst other levies," Mburu stated. 

    The growth was attributed to increased and early remittance from the finance, insurance and manufacturing sectors. 

    Value Added Tax dropped by 7% while Pay as You Earn (PAYE) grew by 2%. Withholding taxes recorded an 18.2% growth. 

    The authority, however, still missed its initial target by Ksh 275 billion. The National Treasury under CS Ukur Yattani had targetted a record high of Ksh 1.88 trillion in tax collected. 

    This explains why Kenya's borrowing level rose. Yattani borrowed over 30% of Kenya's 2.79 trillion budget.

    Digital service fees was added as a new tax for the financial year 2020/21, meaning online business transactions will now be taxed at a rate of 1.5 per cent. 

    The government is also planning to reintroduce the 20% excise duty imposed on betting firms in November 2019. The duty was scrapped off after Kenyatta was shortchanged into signing the Finance Bill 2020.

    Kenya Revenue Authority signage on a building
    Kenya Revenue Authority signage on a building