KRA collects KSh155 billion in tax in July, an 18.7 percent increase
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Treasury shows KRA collected Sh155.06 billion in tax for the month of July, a sharp growth compared to the Sh130.6 billion same time last year
Treasury shows KRA collected Sh155.06 billion in tax for the month of July, a sharp growth compared to the Sh130.6 billion same time last year.
Due to new tax laws and higher economic output, the Kenya Revenue Authority (KRA) saw an 18.7% rise in revenue collection in July compared to the same month last year.
According to the National Treasury, the taxman collected in Sh155.06 billion last month, a significant increase over the Sh130.6 billion it collected in July of last year.
The July collections fell by 29.7% from the record Sh220.6 billion that was collected in June, although they still outperformed monthly collections in six of the twelve months of the fiscal year 2022–23.
July’s revenues were boosted by doubling of value added tax (VAT) on fuel to 16 percent which took effect on July 1.
The High Court had temporarily suspended the implementation of the Finance Act, 2023 which doubled the VAT, but the Energy and Petroleum Regulatory Authority (Epra) still went ahead to effect the tax.
One of President William Ruto’s key goals is to raise adequate tax income through additional levies and broadening the tax base in order to pay for his Sh3.67 trillion first budget.
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Ruto’s first budget has a $718 billion fiscal deficit that will likely be covered by borrowing Sh586.5 billion domestically and Sh131.5 billion outside.
Along with tripling the fuel VAT, the Act also introduces a 1.5 percent housing fee that is subtracted from every employee’s gross pay and an increase in turnover tax from 1 percent to 3 percent.
Meanwhile, National Treasury Cabinet Secretary Prof Njuguna Ndung’u, in disclosures to the International Monetary Fund (IMF), has also indicated plans to introduce further taxes in the coming months to raise further revenues.
One of these tax measures includes the introduction of a motor vehicle circulation tax.
Countries that have implemented this tax have payment of an annual registration fee for motor vehicle owners to use public roads.
Such a tax would be a heavy blow to motorists at a time they are already paying historically high prices of fuel.
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