The Kenya Revenue Authority (KRA) has announced a 6.8% growth in revenue collection, resulting in Ksh2.571 trillion in taxes for the financial year 2024/2025, despite a challenging operating environment.
In a statement issued on July 10, 2025, the Kenya Revenue Authority (KRA) provided a detailed breakdown of how Kenyans contributed Ksh 2.5 trillion in taxes during the 2024/2025 financial year.
“Kenyans paid Ksh 2.571 trillion in taxes for FY 2024/2025. This represents a remarkable 6.8% growth, despite economic challenges. For three decades, you’ve been our partners in nation building,” read part of the statement.
KRA Breaks Down
- Domestic Revenue Performance
According to a statement by the Tax Authority, domestic revenue maintained a steady performance, which saw a collection of Ksh1.688 trillion against a target of Ksh 1.721 trillion. This translates to a 98.1% performance rate.
- Customs Revenue Surpasses Targets
On the other hand, customs revenue increased compared to other streams, with a total collection of Ksh 879.329 billion against a target of Ksh 830.368 billion.
This represented a 105.9% performance rate, and an impressive 11.1% growth compared to the same period in the previous financial year.
- VAT Collections Show Growth
Domestic Value Added Tax (VAT) also experienced positive growth. Collections increased by 4.2% year-on-year, reaching Ksh 327.336 billion.
Notably, collections picked up pace in the second half of the financial year. As per the statement by KRA, the total revenue collection from VAT in the first half was Ksh148.374 billion while the revenue collected in the second half was Ksh178.962 billion
KRA attributed this growth to enhanced compliance initiatives aimed at sealing revenue loopholes and improving VAT administration.
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PAYE Remains a Key Contributor
According to the authority, Pay As You Earn (PAYE) taxes continued to be a stable source of revenue, with the total collection from VAT hitting Ksh 560.963 billion.
This reflected a 3.3% growth and a 99% performance rate, underlining the continued compliance by employers despite policy shifts and adjustments in relief measures.
Also Read: KRA Announces New Interest Rates for Employee and Company Loans
- Corporation Tax
Corporation tax also grew by 9.9% compared to 4.9% in the last financial year.
The performance was boosted by several sectors, including ICT, manufacturing, financial services, real estate, wholesale, and retail, among others.
- Domestic Excise
The tax head recorded a performance rate of 97.2%, with collections amounting to Ksh 69.385 billion. The authority stated that the performance was due to a decline in revenue remitted from manufacturers of beer and tobacco products by 13.9% and 8.9% respectively.
Also Read: KRA Introduces Mandatory Requirement for All Imports Into Kenya
Taxation of Digital Economy
Taxation of the digital economy for the period under review recorded a performance rate of 112% after netting Ksh 14.3 billion.
The growth translated to a 32% growth from the Ksh 10.8 billion collected in FY 2023/24.
These taxes are collected from non-resident taxpayers in the digital economy, including multinational digital companies.
Through tax Amnesty, a total of 3,512,835 taxpayers benefited from the programme after they were granted a waiver on penalties and interests amounting to Ksh 95.645 billion. Through the programme, KRA collected Ksh 29 billion after 116,144 taxpayers voluntarily declared and paid.
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