MISSED TARGETS

Treasury pushes KRA on revenue amid shortfalls

The authority missed its half-year target for the 2019/20 financial year by Sh88.3 billion, netting Sh857.8 billion over the period

In Summary

•National Treasury CS Ukur Yatani now says the taxman has to increase his collection to help meet government financial plans.

•KRA collected Sh779.3 billion in direct taxes, 45.7 per cent of the Sh1.7 trillion revised target for the current financial year, meaning the taxman is lagging behind his target.

 

Treasury Cabinet Secretary Ukur Yatani when he appeared before Senate Finance Committee on November 26 over pending bills.
CONTRACTORS, SUPPLIERS' MONEY: Treasury Cabinet Secretary Ukur Yatani when he appeared before Senate Finance Committee on November 26 over pending bills.
Image: EZEKIEL AMING'A

Pressure is mounting on Kenya Revenue Authority(KRA) to collect more revenues as the financial year stretches into its second half, with Treasury pushing for recourses to meet budget obligations.

This, even as the taxman seeks more funding from the exchequer to pay VAT refunds to private sector, whom have blamed delays for low cash volumes in their businesses.

National Treasury CS Ukur Yatani now says the taxman has to increase his collection to help meet government financial plans.

The authority missed its half-year target for the 2019/20 financial year by Sh88.3 billion, netting Sh857.8 billion over the period.

This includes tax incomes of Sh779.3 billion ,45.7 per cent of the Sh1.7 trillion revised target for the current financial year, meaning the taxman is lagging behind his target.

“They(KRA) should employ all measures so that what is supposed to be collected is collected in good time,” Yatani said during n interview in Nairobi.

The CS said if KRA underperforms on revenue collection, the government will have challenges in administering its budget, including the VAT refunds being claimed by the private sector.

We are putting them on their toes, they must collect enough revenues,” CS Yatani said.

KRA has decried low funding from Treasury for slowing down clearance of VAT claims by importers and exporters.

According to the taxman, the National Treasury currently allocates Sh1.2 billion to pay VAT claims per month while the monthly claims lodgements from refund claimants average Sh2.5 billion.

This, KRA says, creates a deficit that leads to a backlog.

“To address the challenge, KRA has requested additional funding from the National Treasury,” the authority responded to inquiries by the Star.

Treasury's push is meant to help meet revenue targets for the financial year ending June 30.

National Treasury—Statement of Actual Revenues and Net Exchequer Issues as at December 31, 2019, shows total revenue receipts stood at Sh1.245 trillion,with Treasury is expecting to net a whooping Sh2.651 trillion by June 30, 2020, when the financial year closes.

The received amounts or the half-year includes non-tax income of Sh78.5 billion, which is slightly half the targeted Sh138.8 billion.

Domestic borrowing for the period closed at Sh258.2 billion which is half the Sh514 billion 2019-20 financial year target.

During the six months(July-December) foreign governments and international organizations gave the exchequer a total of Sh10.1 billion with this year's targeted loans from these entities standing at Sh66.1 billion.

Sh1.171 trillion out of the total Sh2.7 trillion spending plan for the current financial year had been disbursed to different ministries, Presidency, departments commissions and counties.

Total issues to the county governments, according to a gazette notice issued by CS Yatani, stood at Sh117.3 billion at December.

This is about 30.9 per cent of the total Sh378.5 billion estimated amount expected by counties from the exchequer this year.

On the other hand, the national government received Sh1.054 trillion of the Sh2.273 planned receipts for the current financial year.

Monies released for development for the six months stood at Sh112.8 billion, way below the half-mark of the Sh420.8 billion expected by June 30.