The Kenya Revenue Authority (KRA) is banking on tax policy reforms to collect Sh2.768 trillion by end of the current financial year and surpass Sh3 trillion mark by next financial year 2024/25.
The taxman said it will soldier on with the implementation of National Tax Policy and Medium-Term Revenue Strategy for the period 2023/24-2026/27 to achieve the target. It will also develop and implement its 9th Strategic Plan after the end of the 8th Corporate Plan Cycle in 2023/24.
Despite the challenging economic environment witnessed in the last financial year (2022/23), KRA noted that taxpayers exhibited resilience paying their taxes to support economic transformation.
KRA recorded a revenue collection of Sh2.166Trillion for the period July 2022 – June 2023 compared to Sh2.031 Trillion in the last financial year. The collection for the financial year 2022/2023 was therefore higher than what was collected in the financial year 2021/2022 by Sh135 Billion.
The revenue performance was affected by the slowed domestic economic growth in 2022 which went down to 4.8 percent from 7.6 percent in 2021.
Performance of Key Tax Heads
Excise on Betting:
Excise on Betting registered a performance rate of 116.2 per cent after collecting Sh 6.640 Billion against a target of Sh5.715 Billion. Excise on Betting collected a surplus of KShs 925 Million and grew by 30.0% compared to the same period in FY 2021/2022.
The performance is attributed to the integration of the betting companies into the KRA tax system. The integration has streamlined tax remittance from the sector and scaled up revenue collection
Domestic VAT:
Domestic VAT collection stood at Sh272.452Billion reflecting a growth of 11.3 per cent compared to the previous year. The growth is attributed to the implementation of the Tax Invoice Management System (TIMS), which has enhanced compliance among VAT registered taxpayers
Corporation Tax:
Corporation tax performed at 94.2 per cent with a collection of Sh263.819 Billion. This is a growth of 9.0 per cent over the last financial year. The performance was driven by increased remittance from sectors like: Finance & Insurance; Information & Communication; Manufacturing; Wholesale & Retail Trade; and Electricity, Oil, & Gas. These sectors contributed 77.8 per cent of the Corporation taxes.
Pay As You Earn (P.A.Y.E):
P.A.Y.E registered a growth of 7.2 per cent after collecting Sh494.979 Billion. The performance was mainly driven by remittance from private firms and public sector, which grew by 10.7 per cent and 1.9 per cent respectively.
Domestic Excise:
The tax head recorded a growth of 2.8 per cent in FY 2022/23, with a collection of Shs 68.124 Billion, which translates to a performance rate of 91.4 per cent. The performance is attributed to the growth in revenue from: Cosmetics (60.6 per cent growth); Wines and Spirits (8.7 per cent growth); Bottled Water (4.4 per cent growth); Soft Drinks (8.0 per cent growth); Beer (0.4 per cent growth); and Tobacco (2.8 per cent growth).
KRA said in a statement it will continue to enhance surveillance in the sector to ensure compliance.
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