KRA Misses Revenue Collection Target Despite Collecting KSh 1t In 5 Months

• KRA collected KSh 963.7 billion from July to November, representing 34.6% of its KSh 2.787 trillion target for the 2023/24 financial year
• During a similar period in 2022, KRA had attained KSh 856.6 billion, accounting for 40% of the KSh 2.145 trillion annual target
• The taxman explained that revenue performance was affected by the depreciating shilling and tight financial markets marked by an increase in lending and interbank rates

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

The Kenya Revenue Authority (KRA) fell short of its revenue collection target in the first five months of the 2023/2024 financial year.

KRA collected KSh 1.030 trillion from July to December 8, recording a 15.8% growth in November. Last month, the taxman collected KSh 180.714 billion, up from KSh 156.095 billion in November 2022.

The government's principal revenue collector gathered KSh 963.7 billion from July to November, representing 34.6% of its KSh 2.787 trillion target for the 2023/24 financial year.

During a similar period in 2022, KRA had attained KSh 856.6 billion, accounting for 40% of the KSh 2.145 trillion annual target.

"Revenue collection has progressively increased in the last five months (July –November 2023/24) after KRA collected Ksh 963.746 billion compared to KSh 856.646 billion collected in the same period last financial year, representing a growth of 12.5%," KRA stated.

Why KRA missed its revenue collection target

The taxman explained that revenue performance was affected by the depreciating shilling and tight financial markets marked by an increase in lending and interbank rates.

It was also affected by low domestic demand as indicated by the slowed purchasing power.

"During the period, there was a significant depreciation of the Kenyan shilling against the US dollar by 24.7% in November 2023 and 22.0% in July to November 2023. This, coupled with increasing prices of key products like oil, has the effect of driving down import demand," KRA noted.

KRA misses PAYE target

During the first quarter of the 2023/2024 financial year, KRA collected KSh 123.04 billion in PAYE against a target of KSh 142.93 billion.

In the 2023 Budget Review and Outlook Paper published by the National Treasury, the exchequer blamed delayed disbursements for the missed target.

The shortfall of KSh 19.88 billion (13.91%) was the biggest margin registered since the COVID-19 pandemic period when the government offered tax reliefs.