KRA misses revenue target by Sh107bn despite Ruto spirited efforts
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KRA misses revenue target by Sh107bn for the financial year 2022/23 citing a harsh economic times
KRA misses revenue target by Sh107bn for the financial year 2022/23 citing a harsh economic times.
The Kenya Revenue Authority (KRA), citing an economic downturn, missed its tax collection target by Sh107 billion in the fiscal year that concluded in June 2022.
Taxman collected Sh2.166 trillion (95.3 percent performance rate), missing the goal for the first time in two consecutive fiscal years.
However, tax receipts increased by 6.6 percent from the fiscal year 2021–2022, when Sh2.031 trillion in revenue was collected.
“The revenue performance reflects the prevailing economic indicators, especially the projected GDP growth of 5.8 percent in FY 2022/23 (Budget Policy Statement 2023) compared to a growth of 6.5 percent in FY 2021/22”, the acting Commissioner General, Rispah Simiyu, says in a statement Thursday.
KRA said collections from the excise tax on betting stood at Sh6.65 billion against a target of Sh5.72 billion, representing a 116.2 percent performance rate of 116.2 per cent or a surplus of Sh925 million.
“The performance is attributed to the integration of the betting companies into the KRA tax system. The integration has streamlined tax remittance from the sector and scaled up revenue collection,” Ms Simiyu says.
In October of last year, the taxman integrated its systems with those of betting companies, enabling improved visibility of the revenue produced by the businesses as well as real-time tax collection.
The revenue from digital services tax increased by 207.9 percent to Sh5.33 billion.
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The performance of the fiscal year that concluded in June 2022 was attributed to a number of factors, according to KRA, including a significant expansion of the tax base.
According to the taxman, 940,483 new taxpayers in all were added to the category.
“The Tax Base Expansion Programme enabled KRA to collect Sh14.65 billion in revenue through initiatives such as recruitment of landlords under the Monthly Rental Income (MRI) obligation and the Block Management System (BMS) to map out potential taxpayers,” it says.
Domestic value added tax (VAT) grew by 12.7 percent to Sh272.45 billion.
KRA says the transition to the Electronic Tax Invoice Management System (eTIMs) in February this year was instrumental in netting more revenues.
“It is important to note that VAT growth scaled up to 18.0 percent in February – June 2023 upon implementation of Tax Invoice Management System (TIMS & eTIMs), from an earlier slower growth of 6.7 percent in the first seven months of FY 2022/23,” Ms Simiyu said.
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