The Kenya Revenue Authority (KRA) has collected Ksh. 476.646 billion, surpassing the Financial Year 2021-2022, Quarter One (July – September 2021) revenue target of Ksh. 461.653 billion by KSh. 14.992 billion.
The performance reflects sustained revenue growth in the first three months of the year, with a performance rate of 103.2 percent and growth of 30 percent.
Despite the slow economic growth, KRA commenced the new financial year on an upward trajectory, after surpassing its July 2021 revenue target by a surplus of Ksh. 311 million, after a revenue collection of Ksh. 152.854 billion against a set target of Ksh. 152.543 billion, reflecting a performance rate of 100.2 percent.
“KRA maintained the upward trend in August 2021, collecting Ksh. 138.906 Billion, a performance rate and growth of 103.6 percent and 29.5 percent respectively, above the set target and recording a surplus of Ksh. 4.816 Billion. The Authority further surpassed the September 2021 target of Ksh. 175.02 Billion by Ksh. 9.886 Billion, after a collection of Ksh. 184.886 Billion, thereby registering a performance rate of 105.6 percent and a growth of 28.6 percent,” KRA said in a statement.
The good revenue performance is a reflection of improving the macro-economic environment, relaxation of Covid-19 containment measures, and sustained implementation of enhanced compliance efforts by the Authority. The Gross Domestic Product is expected to grow by 6.3percent in FY 2021/22 as per the 2021 Budget Policy Statement, compared to a contraction of 0.3 percent in 2020.
During the first quarter of the Financial Year, Customs & Border Control (C&BC) sustained its excellent performance after collecting Ksh. 173.241 billion against a target of Ksh. 161.844 billion, reflecting a revenue surplus of Ksh. 11.397 billion.
Customs & Border Control recorded a growth of 25.4 percent in the period under review. KRA attributes Customs & Border Control performance to 31.8 percent growth in non-oil taxes and 15.0 percent growth in petroleum taxes. Non-oil taxes registered a collection of Ksh. 112.438 billion against a target of Ksh. 105.002 billion with a surplus of Ksh. 7.436 billion, while petroleum taxes amounted to Ksh. 60.803 billion against a target of Ksh. 56.842 billion posting a surplus of Ksh. 3.961 billion.
Domestic Taxes performance improved, with a 32.9 percent growth compared to a similar period last year. The Domestic revenue collection stood at Ksh. 302.145 billion against a target of Ksh. 298.626 billion. This translates to a surplus of Ksh. 3.519 billion and a performance rate of 101.2 percent.
Pay As You Earn (PAYE) registered a performance rate of 104.2 percent in the first quarter after a collection of Ksh. 107.787 billion, against a target of Ksh. 103.369 billion resulting in a surplus of Ksh. 4.391 billion. The performance was mainly driven by gradual growth in employment which is a clear sign of economic recovery.
The Value Added Tax (VAT) collections amounted to Ksh. 60.188 billion against a target of Ksh. 59.173 billion, resulting in a surplus of Ksh. 1.015 billion and a growth of 44.5 percent. The good performance has been attributed to enhanced compliance efforts by the Authority and economic recovery.
Corporation tax collection stood at Ksh. 54.330 billion, which is a growth of 21.9 percent over the first quarter compared to 3.7 percent achieved in the past financial year (FY 2020/21). This performance was driven by increased remittance from Energy, Agriculture, Manufacturing, and Transport sectors that grew by 122.0 percent, 103.9 percent, 83.7 percent, and 107.4 percent respectively.
Withholding Tax totaled Ksh. 36.053 billion, representing a growth of 11.9 percent over the first quarter of 2020/21, which was an increase from a growth of 3.8 percent achieved in the last financial year. This further signals economic recovery from the adverse impact of the Covid-19 pandemic.
Domestic Excise amounted to Ksh. 15.392 billion, and a growth of 20.7 percent, over the first quarter last year, compared to a growth of 12 percent recorded in the last financial year. The performance turnaround is attributed to the re-opening of the economy and enhanced compliance efforts by the Authority. The country is on an economic recovery path with the economy projected to grow by 6.3% in FY 2021/22, hence a positive impact on revenue performance.
“KRA continues to drive compliance through investment in modern technology to enhance efficiency in tax mobilization, with enhanced operational efficiency as embedded in the KRA 8th Corporate Plan. The Authority is optimistic that this investment shall continue to sustain the good performance in revenue mobilization. We also continue to focus on trade facilitation and enhanced compliance through the implementation of enhanced scanning and intelligence-led verification of import cargo. KRA will also intensify its fight against tax evasion to ensure that no revenue is lost. These among other measures will continue driving the good performance in revenue collection,” the tax regulator said in a statement.