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September 21, 2018

KRA fell short of 2017 revenue target but did better than 2016

Kenya Revenue Authority Commissioner General John Njiraini confers with Public Investment Committee Chairman Abdulswamad Nassir during presenation of the Authority’s audit report for the financial year 2014/15 to 2015-16 in Parliament on May 22, 2018. /JACK OWUOR
Kenya Revenue Authority Commissioner General John Njiraini confers with Public Investment Committee Chairman Abdulswamad Nassir during presenation of the Authority’s audit report for the financial year 2014/15 to 2015-16 in Parliament on May 22, 2018. /JACK OWUOR

Kenya Revenue Authority missed its 2017/2018 financial year revenue target by Sh172.4 billion, the full year’s economic and budget review shows.

This was mainly due to shortfalls in Income Tax and appropriation in aid (A-I-A) collection.

According to the review tabled in Parliament late on Wednesday, the taxman collected Sh1.48 trillion or an average Sh123.93 billion a month in the year ending June 2018 against a target of Sh1.65 trillion.

Ordinary revenue collected was Sh1.36 trillion, 9.12 per cent less than the set target of Sh1.48 trillion.

While the revenue collection was 11.59 per cent short of the set target, it was Sh86.64 billion higher than the Sh1.4 trillion collected during the 2016/2017 financial year.

The review by the National Treasury shows the cumulative appropriation recorded an under-performance of Sh47.8 billion. Total revenue from the aid stood at Sh122.16 billion.

“ The A-I-A under-performance reflects the problem of under reporting of the ministries expenditure return for the period under review,” says the report. 

Out of the total collected tax, Sh350.63 billion was payroll tax, Sh99.21 billion Import Duty, Sh162.48 Excise Duty, Sh206.25 billion VAT charged on local products, Sh144.8 billion VAT on imports.

Tax from investment revenue was Sh24.12 billion while Sh3.07 billion was from traffic revenue.

Other Income Tax collected stood at Sh289.96 billion while external grants raised Sh27.6 billion against a target of Sh42 billion.

 About 48.12 per cent or Sh712.2 billion of the total revenue collected was done during the first half of the year. This was a 9.6 per cent growth from the Sh649.7 billion collected in the same period over the last financial year.

In the six months to June, the authority attributed the slight increase to better compliance largely with the help of technology and reforms.

KRA commissioner general John Njiraini said the iTax system is largely accredited for the growth. More than 3.2 million Kenyans filed their 2017 income tax returns as at June 30, 2018.

This was a 60 per cent growth compared to the previous financial year, which saw two million Kenyans file their returns.

However, the authority has faced a challenge in implementation of the Excisable Goods Management System (EGMS) stamps aimed at bringing in additional revenues.

EGMS is set to introduce digital stamps on products such as bottled water. It has largely been opposed by manufactures who say it is expensive and would subject them to double taxation, a cost they will likely pass to consumers.

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