The Kenya Revenue Authority- KRA announced on Monday, December 11, that it had collected Ksh 1.030 trillion in the period between July and December 8, 2023.
In a statement, KRA noted that collections for the month of November stood at Ksh180.7 billion hence pushing the total revenue collected in the financial year above the one trillion mark.
This was an increase compared to the Ksh156 billion collected in November 2022.
“The Authority has maintained an upward trajectory in revenue collection, after recording a 15.8% growth in the month of November,” the statement read in part.
“KRA collected Ksh 963.746 billion compared to Ksh 856.646 billion collected in the same period (July to November) last financial year, representing a growth of 12.5%.”
In the statement, KRA attributed the growth in revenue to various factors including the increment of Value Added Tax from 8% to 16% in the Finance Act of 2023.
Additionally, the taxman announced that customs recorded the second highest monthly collection in history with collections amounting to Ksh 72.116 billion.
KRA further said the good performance was attributed to oil taxes that collected Ksh 27.943 billion.
“The good performance by oil taxes was mainly driven by growth in both overall oil volumes and values by 36.7% and 49.5% respectively,” the statement read in part.
“The growth was also driven by positive impact of tax policy which include the VAT rate change from 8% to 16% vide Finance Act 2023.”
However, the tax collector announced several setbacks despite the growth registered in the collections.
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KRA Faces Setbacks in Revenue Target
According to the statement, KRA’s collection was affected by performance of key economic indicators that directly drive revenue collection- among them the weakening shilling and increase in prices.
Increase in oil prices, KRA stated, drove down demand for imports and hence affecting revenue projections.
The authority further stated that its revenue performance was affected by low domestic demand as indicated by the slowed Purchasing Managers Index (PMI) that averaged at 47.18 points in July – November 2023 down from 48.66 points in July – November 2022.
Also among the factors listed in the statement was tight financial markets marked by increase in lending rates and interbank rates.
According to the statement, the high lending rates affected profits made by commercial banks in the period.
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“These key indicators that significantly impact on revenue performance have generally moved contrary to expectations, with adverse impact on revenue mobilization,” the statement read in part.
The body’s target is to collect 2.787 trillion by the end of Financial Year 2023/2024.
In the statement, the revenue authority expressed its confidence that it would hit the target to enable the government to finance its budget.