Kenya’s tax revenues rose 3.0% year on year to KSh 183.1 billion in January 2026 but fell 27.2% from December, reflecting the normal post-holiday slowdown after year-end settlements.
- •The January outcome leaves cumulative July–January FY25/26 collections at KSh 1.34 trillion, equivalent to 51% of the full-year target set by the National Treasury and well below the historical seasonal norm at this stage of the fiscal year.
- •Over the last nine fiscal years, July–January collections have consistently accounted for about 56% of full-year revenue, with a narrow range between 55% and 57%.
- •December receipts are typically inflated by year-end corporate tax settlements, elevated imports ahead of the holidays, and stronger VAT and excise collections linked to festive spending.
By January 30, the Exchequer had raised KSh 2.43 trillion against full-year estimates of KSh 4.43 trillion, with tax revenue at KSh 1.34 trillion, or 51% of the annual target. The shortfall has been bridged largely through domestic borrowing, which reached KSh 732.6 billion by end-January, equivalent to 67% of the full-year domestic borrowing plan of KSh 1.10 trillion.
FY25/26 therefore sits roughly five percentage points below trend. Applying the long-run median seasonality to current collections implies a full-year outturn of about KSh 2.41 trillion, pointing to a shortfall of roughly KSh 220 billion against the Treasury’s KSh 2.627 trillion target.
July–January Share of Full-Year Collections (FY2015–FY2025):
| Fiscal Year | Jul–Jan Revenue (Bn) | Full-Year Revenue (Bn) | Jul–Jan Share |
|---|---|---|---|
| FY2015/16 | 609.2 | 1,112.0 | 54.8% |
| FY2016/17 | 686.2 | 1,253.5 | 54.8% |
| FY2017/18 | 755.2 | 1,311.7 | 57.6% |
| FY2018/19 | 805.4 | 1,440.2 | 55.9% |
| FY2019/20 | 874.5 | 1,427.5 | 61.3% |
| FY2020/21 | 779.3 | 1,484.8 | 52.5% |
| FY2021/22 | 1,010.5 | 1,837.2 | 55.0% |
| FY2022/23 | 1,103.9 | 1,960.4 | 56.3% |
| FY2023/24 | 1,215.9 | 2,160.3 | 56.3% |
| FY2024/25 | 1,251.4 | 2,257.8 | 55.4% |
External loans and grants, by contrast, stood at KSh 234.9 billion, or 41% of the annual estimate, highlighting continued constraints on external financing. Sustained underperformance in ordinary revenue therefore risks front-loading domestic issuance in the second half of the year, increasing rollover pressure and narrowing room for discretionary spending.
January’s year-on-year growth offers some reassurance on underlying momentum. The annual increase points to continued expansion of the tax base, even as consumption and investment remain uneven. The sharp month-on-month decline from December reflects entrenched seasonality.
KRA has intensified compliance and enforcement efforts to support collections through the remainder of the fiscal year. Measures include stricter enforcement of the electronic Tax Invoice Management System, expanded automated cross-checks across declared income, invoicing, withholding tax, and customs data, and tighter linkage of tax compliance to licensing, procurement, and regulatory approvals. The focus remains on improving compliance and sealing leakages rather than increasing statutory tax rates.
Customs and border taxes will be a key swing factor from February to June. Import values, fuel volumes, and exchange-rate movements directly influence VAT on imports, excise duties, and import declaration fees. Oil-related taxes have contributed materially in recent months, though demand sensitivity and pump price adjustments limit predictability.
