Kenya Revenue Authority (KRA) has for the first time hit a revenue collection mark of Sh2 trillion, surpassing the set target for 2021/22 by close to Sh150 billion.
The revenue agency collected Sh2.03 trillion during the financial year under review, against an original target of Sh1.88 trillion and two revised targets of Sh1.91 trillion and Sh1.97 trillion respectively.
This is a 22.3 per cent improvement in revenue collection compared to the previous financial year when it collected a total of Sh1.66 trillion.
This is the first time KRA is surpassing its set target in 14 years even after an upward revision of its initial target adjusted.
KRA Commissioner-General James Mburu said the positive revenue growth rate reflects the improved tax compliance from taxpayers who contributed to the collection of a revenue surplus of Sh148.9 billion.
He added that the outstanding performance is consistent with the prevailing economic indicators, especially the projected GDP growth of 5.9 per cent in the financial year ended June 30.
"The performance is attributed to the implementation of key strategies as enshrined in KRA’s 8th Corporate Plan, tax policy measures and enhanced revenue administration,'' Mburu said.
Under this plan, KRA targets to collect Sh6.831 trillion by the end of the financial Year 2023/2024.
During the financial year under review, Domestic Taxes collected Sh1.297 trillion against a target of Sh1.267 trillion. This translates to a performance rate of 102.4 per cent with a surplus collection of Sh30.445 billion.
Customs and Border Control sustained excellent performance with a collection of Sh728.530 billion against the set target of Sh702.8 billion, reflecting a revenue surplus of Sh25.7 billion and a growth of 16.6 per cent.
Non-petroleum taxes grew by 20.7 per cent while petroleum taxes recorded a 9.4 per cent growth.
Non-oil taxes collections amounted to Sh480.540 billion against a target of Sh446.516 billion registering a surplus of Sh34.024 billion while petroleum taxes amounted to Sh247.990 billion reflecting a performance rate of 96.8 per cent.
Corporation tax collection stood at Sh242.018 billion against a target of Sh218.161 billion.
This replicates a growth of 32.7 per cent over the last financial year. This performance was driven by increased remittance from key sectors like finance and insurance, manufacturing, wholesale and retail trade, and Transport and Storage sectors.
Pay As You Earn (P.A.YE) registered a collection of Sh461.815 billion against a target of Sh455.129 billion. The performance was mainly driven by the gradual recovery of the job market emanating from economic recovery.
Value Added Tax collections amounted to Sh244.7 billion, reflecting a growth of 24 per cent. The performance is primarily attributable to enhanced compliance efforts by KRA and the economic recovery.
Excise tax grew 6.2 per cent, collecting Sh66.5 billion. The performance turnaround is attributed to stringent enforcement against tax evasion focusing on curbing illicit trade and blatant non-compliance with tax laws by the players in the alcoholic and cigarette sectors.
To support the fight against economic crimes, KRA has also partnered with other jurisdictions globally to exchange tax information. Kenya’s Exchange of Information (EOI) steadily increased from 73 in 2020 to173 in 2021.
Kenya also recovered Sh10.5 million in 2020 andSh985.2 million last year.
The Voluntary Tax Disclosure Program (VTDP) contributed to increased revenue collection.
The programme was introduced in 2020, commenced the early last year, and is expected to run to December next year.
Under the programme, Sh8.546 billion in taxes was collected from 17,038 applications in the fiscal year. A total of Sh9.562 billion was applied for disclosure and waivers.
The agency has also continued to employ technological strategies to assist seal revenue loopholes.
One of the strategies is the web-based system, iWhistle. The system allows the public to unanimously report corruption to KRA.
Through this initiative, the agency received a total of 850 corruption reports from taxpayers with a total tax estimate of Sh6.26 billion up from Sh2.9 billion the previous year.
KRA has progressively enhanced the iTax system for a better user experience. As a result, over 5.6 million taxpayers filed their tax returns for the year 2021.
The investment in technology has further enhanced Customs operations and consequently improved revenue growth.
For instance, the Integrated Customs Management System (iCMS) has reduced the Customs cargo clearance and processing time enhanced compliance and increased efficiency.
The system has helped reduce time-taken to clear air cargo from an average of 6 days to 48 hours (2 days).
