The Kenya Revenue Authority (KRA) announced it recorded a 6.8 per cent growth in revenue collection, surpassing the initial target of Sh2.555 trillion after collecting Sh2.571 trillion for the Financial Year 2024/25.
KRA Commissioner General Humphrey Wattanga attributed this to mobilisation strategies that sought to digitalise the revenue administration policies and strengthen human resource management.
KRA deployed Artificial Intelligence to analyse scanner images; a key factor that has aided the interception of smuggled goods and sealed revenue leakages.
Further, KRA eliminated taxpayers’ complexities by simplifying the filing of returns through VAT auto-population.
The introduction of a Centralized Release Office (CRO) also made cargo clearance at the ports easier and more efficient.
According to KRA, this improved cargo clearance time from an expected average of 110 hours to 43 hours and enabled KRA to collect Sh22.7 billion.
The taxman further improved organisational restructuring to create a responsive tax administration framework that strengthens the digital infrastructure for data-driven decision-making and automation.
“Among these changes included integration of the Large and Medium Taxpayers into a core functional area, and the Micro and Small Taxpayers as another core functional area,” a statement read in part.
“The changes provided more personalised support to address taxpayers’ unique needs. The functional areas have also supported tax base expansion in alignment with the Medium-Term Revenue Strategy.”
Revenue Performance for FY 2024/25
The exchequer revenue, the total revenue collected by the National Treasury, grew by 4.5 per cent after KRA collected Sh2.323 trillion compared to Sh2.223 trillion collected in the previous fiscal year.
This translated to a performance rate of 99 per cent against the set target of Sh2.347 trillion.
In terms of agency revenue, the taxman collected Sh248 billion, surpassing the Sh40 billion target.
This translated to a performance rate of 119.5 per cent.
Agency revenue involves the total revenue collected on behalf of other government agencies.
Domestic revenues, collected within the country, registered a growth of 4.8 per cent after KRA collected Sh1.688 trillion against a set target of Sh1.721 trillion, translating to a 98.1 per cent performance rate.
In terms of customs revenue, collected at the border from international trade, recorded a 105.9 per cent performance rate with a collection of Sh879 billion against a set target of Sh830 billion.
This translated to an 11.1 per cent revenue growth in relation to the previous financial year.
Domestic VAT grew by 4.2 per cent after the Authority collected Sh327.336 billion.
Excise tax on betting services also recorded a 117.2 per cent performance rate after registering a Sh1.9 billion surplus.
The Pay as You Earn tax registered a Sh560.9 billion, indicating a 3.3 per cent growth.
“Despite the slow growth, the tax head recorded a performance rate of 99.0%.
The slow growth was attributed to utilisation of adjustment vouchers by taxpayers to offset tax liabilities and policy impacts, which included adjustment of SHIF and Housing Levy from relief to allowable deductions before tax computation.”
Corporation Tax grew by 9.9 per cent compared to 4.9 per cent with a Sh304.833 billion against a target of Sh321.080 billion.
The performance was boosted by several sectors, including ICT, manufacturing, financial, real estate, wholesale and retail, among others.
The tax head recorded a 97.2 per cent performance rate in domestic excise collection, with a collection of Sh69.385 billion.
The performance was attributed to a decline in revenue remittance from manufacturers of beer and tobacco products by 13.9% and 8.9% respectively.
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