Kenya Revenue Authority has a monumental task of collecting record Sh567 billion in June 2024 if it is to meet its revenue collection target for the current financial year.
Kenya’s statement of actual revenues & net exchequer issues as of 31st May 2024 by the national Treasury shows that tax revenue collections for May 2024 were up 9.5 percent year on year to Sh183.1 billion.
However, this still falls short if the taxman is to hit close to the Sh2.4 trillion annual target for the 2023-24 financial year.
The May 2024 outturn now means June 2024 has to deliver a Sh567.0 billion bumper collection to meet the target.
However, the taxman has never collected that much in a month. KRA delivered a record Sh220.6 billion tax revenue collection in June 2023 pulling 2022/23 performance to 95.0 percent.
Collecting Sh567 billion in June alone will be a monumental task considering that over the first eight months of the 2023/24 financial year, the taxman collected taxes averaging Sh171.7 billion monthly.
Based on its annual target to collect Sh2.49 trillion during the financial year, this means that the collections recorded shortfalls averaging Sh36.2 billion monthly.
“Tax revenue collections for the period July 2023 to May 2024 were up 10.8 percent year on year to Sh1.93 trillion,” reads the statement of actual revenues & net exchequer issues contained in the latest gazette notice.
The disclosures show that with a month to go, non-tax revenue is already ahead of target by Sh13.2 billion.
Non-tax revenue collection closed May at 116.34 per cent performance rate based on the full 2023-24 financial year target
Based on 2023-24 financial year trends government’s financial management oversight body, the Parliamentary Budget Office had earlier warned that the taxman will fall short of the collection by Sh300 billion.
KRA has been betting on digitisation and improved compliance from taxpayers to raise nettings from taxes.
The agency revealed during a parliamentary session that it is banking on the implementation of national tax policy and medium tax policies to generate income for the government to fund the development agenda.
This revelation comes at a time that KRA is facing another hurdle after the treasury presented a higher budget of Sh3.99 trillion.
However, MPs have termed President William Ruto’s Sh3.9 trillion budget overambitious and that which would stretch the country’s revenue raising measures.
Speaking post budget presentation, lawmakers raised concerns with how the multi-trillion budget will be financed.
Taxes are projected to realise Sh2.9 trillion of the budget while the government will go borrowing for Sh600 billion.
The rest of the deficit—according to the budget estimates—will be realised from donors and appropriation in aid from government services.
The Cabinet Secretary, national treasury and economic planning Njuguna Ndung’u, in the statement of actual revenues & net exchequer issues says that Exchequer Balance as at 31 may 2024 is Sh5.5billion.
He further states that domestic Borrowing of Sh851.9 billion comprises of Net Domestic Borrowing Sh471.4 billion and Internal Debt Redemptions (Roll-overs) Sh380.5 billion.
And external loans and grants includes Sh208.3 billion ($1.5 million) being proceeds received in February 2024 from issuance of Eurobond and applied in buying back part of the notes due in June 2024.