The Kenya Revenue Authority (KRA) collected KSh166 billion revenue in December 2020, exceeding its revenue collection target for the month of December by KSh 2 billion. The revenue collection was 3.5% higher than the KSh160 billion collected in the corresponding period in 2019, according to a statement on KRA’s website.
It was the first time since the onset of the Covid19 pandemic that KRA surpassed its revenue collection target. The government agency attributed the increased revenue collection to improved economic conditions since the easing of covid19 restrictions. Efforts by the agency to increase tax compliance also contributed to improved revenue collection.
KRA’s Customs & Border Control (C&BC) Department collected the highest ever monthly revenue collection of 60.777 billion in December, representing a 40.9% growth in the revenue collected from the same period in 2019.
Governments efforts to lower exemptions and remissions bore fruit as the tax exemptions and remissions in the customs department fell by 39.3% in December 2020, thereby boosting revenue collection by KSh3.34 billion.
Domestic Taxes had the best performance rate of 91.1% in December, since the arrival of covid-19 in Kenya in March 2020. KRA says that Pay As You Earn (PAYE) taxes hit 99.8% of the set target while Withholding Tax exceeded the target by Ksh 725 million. Corporate taxes reached 93.5% of the set target.
The Revenue Authority is optimistic that the recovering economy and efforts to increase tax compliance will boost tax revenue collection in 2021. In addition, the introduction of the digital services tax, minimum alternative tax, and voluntary disclosure program will boost KRA’s revenue collection goals.