Tax collections in July and August hit Sh178.20 billion, fresh data from the National Treasury shows, pointing to stronger government revenue performance this financial year compared to last year.
This represents a Sh25.47 billion or 16.68 per cent growth, over Sh152.73 billion the taxman collected in the same period of the 2015-16 financial year.
Non-tax revenues rose 90.74 per cent to Sh3.09 billion from Sh1.62 billion in the July-August period last year, Treasury Cabinet Secretary Henry Rotich says in the Statement of Actual Revenues and Exchequer Issues for the period to August 31. It was published in the Kenya Gazette last Friday.
The Treasury has set a target of Sh1.37 trillion in ordinary revenues for the Kenya Revenue Authority this financial year, which is Sh160 billion more than the Sh1.21 trillion collected in the fiscal year ended June 30.
The target comprised of Sh1.33 trillion in tax revenues and Sh44.38 billion in non-tax revenues.
The KRA is banking on continued recruitment of new taxpayers through online tax filing platform, iTax, and increased taxes after the Excise Duty Act 2015 came to force last December to meet the targets.
Other measures include linking the iTax to third-party databases, starting with firms doing business with the government under the Integrated Financial Management Information System.
“The process of doing a linkage between that (IFMIS) database and iTax is almost complete. We actually expect to have exchange of information between IFMIS and iTax very soon,” KRA commissioner-general John Njiraini said on July 27. “There will be some taxes that we can recover directly even before the money is paid to somebody because of that linkage like withholding VAT and withholding income tax. That process has started.”
Total government revenues in July and August increased to Sh291.88 billion, which is Sh110.67 billion more than the Sh181.21 billion earned in the same period of the 2015-16 fiscal year.
The government has a budget of Sh2.02 trillion trillion this financial year.
Net domestic borrowing – the difference between what was borrowed and what was paid to maturing bills and bonds – was Sh33.05 billion, Rotich said. The Treasury is targeting a net domestic debt of Sh406.61 billion in the 12 months period to June 2017.
“Going forward, we remain committed to bringing the fiscal deficit down gradually to below 4.0 percent of GDP in the medium term,” Rotich said in his Budget Statement on June 9. “This reduction should strengthen our debt sustainability position.”
The data shows that the target for grants has been exceeded by 54.16 pert cent two months into the fiscal year to Sh25.93 billion against a full-year estimate of Sh16.82 billion.
Other sources of revenues for the government included Sh10.11 billion in commercial loans, while Sh6.44 billion was recovered from previously allocated cash which was not spent.
Expenditure in the two months stood at Sh182.11 billion against Sh1.73 trillion for the 12 months from July. This included Sh102 billion in recurrent expenses against a full-year estimate of Sh790.83 billion, and Sh2.64 billion in development expenditure, which has been allocated Sh416.40 billion this financial year 2016-17 budget.
The remainder Sh77.16 billion went into Consolidated Fund Services whose cash is spent on paying the wage bill, servicing maturing public debt and honouring due pensions and gratuities. The CFS was allocated Sh527.31 billion this fiscal year, and Sh320 million went into payment of salaries and allowances.
The 47 counties had withdrawn a cumulative Sh29.49 billion out of the Sh284.72 billion they were allocated for the full year.