Kenya Revenue Authority exceeds collection target

BY VICTOR ADAR

The improved performance comes after eight years

Kenya Revenue Authority (KRA) has surpassed its revenue collection target in the financial year 2020/2021 by Sh1.669trn compared to the previous financial year’s Sh 1.607trn.

According to the authority’s commissioner general Githii Mburu, the target as reflected in the 2021 budget policy statement was Sh 1.652trn, amount which was surpassed with a surplus of Sh 16.808bn, representing a performance rate of 101% and revenue growth of 3.9% compared to the last financial year.

“This performance is consistent with the prevailing economic indicators, especially the projected GDP growth of 0.6% in 2020,” Mr Mburu said in a press statement. “In the period under review, the exchequer revenue grew by 2.3% with a collection of Sh 1.544trn compared to Sh 1.510trn collected in financial year 2019/2020 and represents a performance rate of 100.9% against the target of Sh 1.530trn.”

The commissioner added that the performance of Sh 1.544trn is before accounting for Sh 18.5bn that the Treasury has undertaken to pay on behalf of taxpayers for various reasons including economic hardship.

While the Domestic Taxes Department (DTD) collected Sh 1.039trn during the financial year translating to a performance rate of 99.8%, Customs and Border Control (C&BC) managed Sh 624.77bn surpassing its target of Sh 606bn, representing a performance rate of 103.0% and recording a surplus of Sh 18.248bn.

Petroleum taxes amounted to Sh 226.680bn posting a growth of 34.5% and a surplus of Sh 12.252bn against a target, while non-oil revenue recorded a growth of 16.4% with collections amounting to Sh 398.089bn which was above target by Sh 5.996bn.

“KRA adopted stakeholder engagement as a key pillar in its business processes with a view of building strong partnerships as foundations for trust, which is key for voluntary tax compliance. This made KRA more approachable and ready to dialogue on issues pertinent to stakeholders. This approach was productive, not only in enhancing good relationships with taxpayers but also in providing new ideas and innovations useful for improving the tax environment and revenue collection,” said Mburu.

He added that the introduction of Alternative Dispute Resolution (ADR) saw taxpayers come forward to find an amicable solutions in disputes with KRA. With the main objective being to ensure, faster, objective and efficient resolution of tax disputes, ADR enabled KRA to unlock Sh 31.435bn in taxes out of 552 cases resolved during the financial year 2020/2021.

Mr Mburu also attributes the good performance to Tax Base Expansion (popular as TBE), which was a key deliverable in the 7th Corporate Plan. Through this initiative, KRA recruited more taxpayers through the newly implemented taxes including digital services tax, minimum tax, and voluntary tax disclosure among others. 

Although active taxpayers increased from 3.94mn to 6.1mn during the 7th corporate plan, the authority’s 8th corporate plan targets to collect Sh 6.831trn by the end of financial year 2023/2024.

“With the support of taxpayers, the projected economic recovery of 6.6 % in 2021, progressive tax policy frameworks, and a robust tax compliance mechanism, KRA is confident that it will achieve this target and enable the country to sustain its economy,” said Mburu.

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