Kenya’s tax authority crossed the KSh 2 trillion mark in revenue collection for the first nine months of the 2025/26 fiscal year, but now faces a sharper climb to meet its full-year target as economic pressures persist.
- •The Kenya Revenue Authority (KRA) said it collected KSh 2.038 trillion by March 31, equivalent to 96.1% of its nine-month target of KSh 2.122 trillion and marking an 11.4% increase from the same period a year earlier.
- •The performance places the authority at about 69% of its full-year goal of KSh 2.97 trillion, leaving a gap of roughly KSh 932 billion to be raised in the final quarter.
- •KRA attributed the growth to improved compliance and digital reforms, even as households and businesses navigated a challenging economic environment marked by subdued demand and elevated costs.
Customs and border control revenue outperformed expectations, reaching KSh 733.7 billion and exceeding its target with a 100.9% performance rate, supported by increased import volumes and administrative efficiencies.
Domestic taxes remained the largest contributor, generating KSh 1.301 trillion over the nine-month period, reflecting steady but moderate expansion.
Macroeconomic conditions offered mixed signals. Economic growth improved to 4.9% in the third quarter of 2025, while inflation stood at 4.4% in March 2026, driven mainly by food, transport and housing costs.
KRA said digital initiatives such as its electronic tax invoice system and expanded API integrations with businesses were helping to widen the tax base and enhance compliance.
Despite the gains, the authority’s full-year target will require a significantly stronger collection pace in the final three months, highlighting the ongoing tension between revenue mobilisation efforts and underlying economic constraints.
KRA said it would intensify enforcement and compliance measures in the final quarter to close the gap and safeguard revenues needed for government spending.
