The Kenya Revenue Authority (KRA) collected a record KSh2.844 trillion in the 2025/26 financial year, with Pay As You Earn (PAYE) and Value Added Tax (VAT) remaining among the biggest contributors.
In a report issued on July 10, KRA said it collected KSh598.8 billion from Pay As You Earn (PAYE) in the 2025/26 financial year.
The authority said the collections grew by 6.7 percent from the previous year, achieving 91.8 percent of the target.
“KRA collected Ksh598.807 Billion from PAYE, signifying a growth of 6.7% and a performance rate of 91.8%. While this is an improvement compared to a growth of 3.3% recorded in FY 2024/25, it is still lower than the average growth of 8.5% recorded in FY 2022/23-2023/24,” read part of the statement.
KRA Reports Higher PAYE and VAT Collections
At the same time, Domestic Value Added Tax (VAT) collections reached KSh355.3 billion in the 2025/26 financial year, marking an 8.5 percent increase from the previous year.
The taxman noted that VAT performance strengthened between January and April 2026, with collections averaging 98 percent of the target and recording 15.5 percent growth during the period.
However, collections were affected between May and June 2026 after taxpayers in the oil sub-sector claimed substantial refunds following the reduction of the applicable VAT rate from 16 percent to 8 percent.
The authority also reported higher collections from betting-related taxes. Excise Tax on betting services generated KSh16.5 billion, surpassing its target and recording 24.9 percent growth compared to the previous financial year.
Betting Tax and Withholding Tax on betting and gaming also increased by 20.3 percent and 59.2 percent, respectively.
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Five Key Sectors Push KRA Revenue to KSh2.84 Trillion
According to KRA, the manufacturing, energy, financial and insurance, information and communication, and wholesale and retail trade sectors recorded a combined revenue growth of 8 percent.
Combined, the sectors account for 27.4 percent of Kenya’s nominal Gross Domestic Product (GDP).
The manufacturing sector emerged as the largest contributor, generating KSh462 billion, up from KSh423 billion in the previous financial year. The sector accounted for 16.2 percent of KRA’s total collections, with VAT, PAYE, Excise Duty and Corporation Tax making up nearly three-quarters of the revenue.
Additionally, the Energy sector followed closely, contributing KSh445 billion, a 9.1 percent increase from the previous year.
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KRA also attributed the growth mainly to higher collections from customs and oil taxes. The sector accounted for 15.6 percent of the authority’s total revenue.
Further, the financial and insurance sector generated KSh320 billion, contributing 11.3 percent of total revenue. Corporation Tax accounted for 34.8 percent of the sector’s collections, while Withholding Income Tax and PAYE made up another 47.1 percent.
Meanwhile, the information and communication sector recorded KSh248 billion in revenue, up from KSh230 billion in the previous financial year, representing 7.9 percent growth. The sector contributed 8.7 percent of KRA’s total collections, with Excise Duty on airtime and financial services, Corporation Tax, Domestic VAT and PAYE among the main revenue sources.
The wholesale and retail trade sector collected KSh288 billion, reflecting 10.3 percent growth from KSh261 billion in the previous financial year. The sector accounted for 10.1 percent of KRA’s total revenue.
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