- To achieve the target, the taxman was supposed to collect a monthly average of Sh175 billion.
- Late last year, Ruto challenged KRA to collect Sh4 trillion, threatening to send top management packing if they fail to seal leaks in collections.
Image: FILE
Kenya Revenue Authority (KRA) is likely to miss its collection target for the year ending June 30 if the total receipts for eight months to February are anything to go by.
The Statement of Actual Revenues and Net Exchequer Issues by the National Treasury for the period to February 28 shows the revenue agency has so far collected Sh1.23 trillion against a target of Sh2.1 trillion.
"Tax revenue collection so far stands at 58.6 per cent of the current financial year's target,'' the exchequer said in the statement.
In February, KRA collected Sh131.4 billion, the second lowest monthly collection in the financial year after July 2022's Sh130.6 billion.
To achieve the target, the taxman was supposed to collect a monthly average of Sh175 billion.
The rise in tax collections is attributable to improved economic conditions following the lifting of Covid-19 restrictions at the back end of last year alongside improved efficiency in collections by KRA.
In addition to the tax settings, KRA collected Sh44.5 billion in non-tax revenues which present nettings from fines and other levies on taxpayers.
KRA has been betting on digitisation and improved compliance from taxpayers to raise nettings from taxes.
The taxman expects to enlist a further one million persons this year to lift the number of taxpayers registered on the i-Tax system to 7.1 million as of June 2023.
KRA is set to be under pressure to improve its collections as the new government administration prioritises domestic revenue mobilisation to plug the budget deficit.
The projected under-collection is coming at the time President William Ruto's government is focusing on domestic revenue collection to cut on borrowing.
Late last year, Ruto challenged KRA to collect Sh4 trillion, threatening to send top management packing if they fail to seal leaks in collections.
“I need help with our debt situation. I have agreed with KRA that as a country, must move from Sh2.1 trillion to between Sh4-5 trillion,” he stated.
He regretted that Kenya’s revenue collection accounts for 14 per cent of the country’s Gross Domestic Product (GDP) while in other middle-income countries, the figure is as high as 25 per cent.
Rto's regime has since done a total overhaul of KRA's management, appointing Anthony Mwaura as the new chairman.
Last month, Commissioner General Githii Mburu resigned after a three-year and seven months stint at the seat on the 30th floor of Nairobi's Times Tower.
In his place, the board named the Commissioner of Domestic Taxes, Rispah Simiyu, to serve in an interim role “until the position is substantively and competitively filled.
In general, the government received 726.8 billion in total revenues in the eight months, with taxes constituting nearly 70 per cent of the revenues.
Of the Sh370 billion county governments expect an equitable share from the national government, the exchequer released Sh183.1 billion, which translates to 49.5 per cent of the annual budget.