- The authority expressed confidence that it will continue with the upward trajectory and achieve the set target.
- KRA noted that domestic taxes amounted to Sh108.174 billion in November 2023, translating to a revenue grew of 14.7 per cent.
Kenya Revenue Authority (KRA) has hit the Sh1 trillion mark as of December 8, 2023, the taxman has announced.
KRA said it has maintained an upward trajectory in revenue collection, after recording a 15.8 per cent growth in November.
In a statement by acting Commissioner of Strategy, Innovation and Risk Management Alex Mwangi, KRA said it collected Sh180.714 billion up from Sh156.095 billion in November 2022.
“Revenue collection has progressively increased in the last five months (July –November 2023/24) after KRA collected Sh963.746 billion compared to Sh856.646 billion collected in the same period last financial year, representing a growth of 12.5 per cent,” KRA said.
KRA said it targets to collect Sh2.787 trillion by the end of the Financial Year 2023-24.
The authority expressed confidence that it will continue with the upward trajectory and achieve the set target to enable the government to sustain the country’s economy.
The taxman, however, noted that despite the growth, the collection was affected by the performance of key economic indicators that directly drive revenue collection.
“These key indicators that significantly impact on revenue performance have generally moved contrary to expectations, with adverse impact on revenue mobilisation,” the statement read in part.
KRA cited the significant depreciation of the Kenya shilling against the US dollar by 24.7 per cent in November 2023 and 22.0 per cent in July – November 2023.
“This, coupled with increasing prices of key products like oil has an effect of driving down import demand. While import values (in Kenya Shilling terms) grew by 36.0 per cent and 11.0 per cent in November 2023 and July – November 2023 respectively, in dollar terms, the growth for the month was subdued to 9.0 per cent, and a decline of 9.2 per cent was recorded cumulatively,” KRA explained.
It added that revenue performance was also affected by low domestic demand as indicated by the slowed Purchasing Managers Index (PMI) that averaged 47.18 points in July – November 2023 down from 48.66 points in July – November 2022.
KRA noted that the tight financial markets marked by increases in lending rates and interbank rates, have slowed down credit extension, especially to the private sector, resulting in a decline in bank profitability by 4.9 per cent as of September 2023.
The authority noted that the customs recorded the second-highest monthly collection in the history of KRA.
“Customs revenue collections amounted to Sh72.116 billion equivalent to a growth of 17.6 per cent over Sh61.322 billion realised in November 2022,” KRA said.
KRA attributed the good performance to oil taxes that collected Sh27.943 billion, translating to a growth rate of 42.5 per cent. A total of Sh19.610 billion was collected in the same period in the last financial year.
“The good performance by oil taxes was mainly driven by growth in both overall oil volumes and values by 36.7 per cent and 49.5 per cent respectively. The growth was also driven by the positive impact of tax policy which included the VAT rate change from eight per cent to 16 per cent vide Finance Act 2023.”
KRA further noted that domestic taxes amounted to Sh108.174 billion in November 2023, translating to a revenue growth of 14.7 per cent. A total of Sh94.331 billion was realised in November 2022.