The Kenya Revenue Authority (KRA) has hit the Sh. 2 trillion mark after collecting Sh. 2.112 trillion as of 30th April 2025.
Speaking in a press statement to the media, KRA Commissioner General Humphrey Wattanga said that the collection reflects a performance rate of 96.5 percent against the target of Sh. 2.189 trillion.
Wattanga said that during the period, revenue collection registered a growth of 6.1 percent reflecting an upward trajectory in collection compared to Sh. 1.990 trillion realized in the same period during the previous financial year, 2023/2024.
“In the period under review, domestic taxes amounted to Sh. 1.386 trillion between July-April 2024/2025, translating to a revenue growth of 4.7 percent over Sh. 1.3 trillion realized in July-April 2023/2024,” he said.
He added that customs revenue collection also grew by 9.1 percent after registering a cumulative collection of Sh. 722.7 billion compared to Sh.662.4 billion that was collected in the same period of financial year 2023/2024.
On agency revenue collected on behalf of other government entities, the authority stated that they had a collection amounting to Sh.205.5 billion, registering a performance rate of 111.8 percent against a target of Sh.183.789 billion.
“This represents a growth of 37.1 percent compared to the collection of Sh.149.876 billion realized in the same period of previous financial year 2023/2024,” added Wattanga.
On statistics given, Exchequer revenue collected on behalf of the National treasury amounted to Sh.1.906 trillion, reflecting a performance rate of 95 percent against a target of Sh.2 trillion.
This represents a growth of 3.6 percent compared to the collection of Sh. 1.84 trillion that was collected in the same period in the previous financial year 2023/2024.
According to the Commissioner General, despite the progressive growth, the collection was affected by various economic indicators that directly drive revenue collection adding that the various indicators that influence revenue performance have generally moved contrary to expectations, affecting revenue mobilization.
He noted that Gross Domestic Product (GDP) grew at a slower pace of 4 percent in Quarter three (Q3), 2024, compared to 6 percent in Quarter three (Q3) 2023.
Similarly, the Purchasing Manager Index (PMI) averaged at 49.8 between July 2024 and April 2025, indicating a slowdown in private sector activities.
“This subdued demand was further evidenced by a 1.6 percent drop in import values, an important indicator of domestic demand for both raw materials and consumer goods,” he added.
Additionally, despite the Central Bank of Kenya (CBK) lowering its base lending rate to 10.75 percent, commercial bank lending rates remained high, averaging 17.22 percent as several banks had yet to adjust their rates.
The Commissioner General also noted that the disparity negatively impacted private sector borrowing and investment. However, he stated that there are strong indications that most banks are working towards ensuring compliance.
Wattanga added that despite a stronger shilling, the value of imports declined, particularly oil which dropped by 10.2 percent. Export earnings also shrank by 3.6 percent, driven by declines in key sectors such as tea and horticulture.
He said the adverse effects from most of these indicators is beginning to dissipate as most of them start to experience a turnaround in the recent past.
He noted that a recent policy change has allowed taxpayers to offset their current tax liabilities using adjustment vouchers such as refund and overpayment adjustment vouchers.
“A number of taxpayers utilized Sh.53.8 billion in adjustment vouchers accrued from previous periods to offset current tax liabilities, reducing effective collection,” he said.
Despite revenue mobilization being impeded by impacts from the above factors, KRA enhanced its compliance through various initiatives.
“The implementation of a Centralized Release office has significantly improved the efficiency of the cargo clearance process. This reform has positively impacted customs revenue performance, with revenue growth increasing from an average of 7 percent as of the end of January 2025 to 22.6 percent in March and 14.4 percent in April 2025,” he added.
Additionally, he said the initiative has contributed to enhanced import values, resulting in an increase in average daily non-oil revenue from Sh.2.087 billion during the period July to February 2024/2025, to Sh.2.309 billion in March and April 2025.
To further improve tax compliance and convenience for landlords, the Electronic Rental Income Tax System (eRITS) was recently rolled out. This digital platform enables landlords and property owners to seamlessly compute, file and pay Monthly Rental Income (MRI) tax.
It also includes property management tools such as property registration and tenancy management, providing a comprehensive, user-friendly experience on a single platform.
The tax amnesty programme has also seen strong uptake generating Sh. 13.5 billion in revenue between December 2024 and April 2025. This initiative aims to encourage voluntary compliance by offering relief on penalties and interests for taxpayers who settle their principal tax liabilities.
“KRA has so far waived Sh. 164.9 billion in penalties and interest, benefitting over three million taxpayers,” he said.
The introduction of the Electronic Tax Invoice Management System (eTIMS) has enhanced the ability to detect and prosecute VAT fraud schemes by digitizing invoicing and tax reporting, eTIMS promotes greater accountability and has led to improved levels of tax compliance across the board.
The Enhanced Dispute Resolution framework has expedited the resolution of tax-related disputes, allowing for quicker recovery of revenue previously tied up in legal processes. As a result, Sh.21.9 billion was released for collection during the period from January to March 2025.
“KRA targets to collect Sh. 2.668 trillion by the end of financial year 2024/2025. The authority is confident that it will continue with the upward trajectory and achieve the set target to enable the government to sustain the county’s economy,” he said.
By Chari Suche
