According to data from the National Treasury, Kenya's Value Added Tax (VAT) collections are on a steep upward trajectory, cementing its position as the country's second-largest tax head after income tax.
In the 2023/24 financial year, VAT revenue stood at Sh645.5 billion, rising marginally to Sh660.7 billion in 2024/25.
However, Treasury forecasts point to aggressive growth ahead.
Collections are projected to climb to Sh771.7 billion in 2025/26 and reach Sh829.2 billion by 2026/27.
By the 2028/29 fiscal year, VAT is expected to cross the historic trillion-shilling milestone at Sh1.021 trillion, eventually hitting Sh1.127 trillion by 2029/30.
This projected surge underscores the state's reliance on consumption taxes to drive domestic revenue mobilisation, though it also signals a tightening squeeze on consumer purchasing power across the economy.
