Tax receipts fall Sh13bn in one month

Total tax receipts in the first month of the financial year fell 12.02 percent, mirroring an environment of depressed economic activity hurting business and family earnings.

Revenue statistics published on Friday by Treasury secretary Ukur Yatani showed Kenya Revenue Authority (KRA) collected Sh94.54 billion in taxes in July compared with Sh107.45 billion a year earlier, the lowest receipts since 2017.

The Sh12.92 billion drop in taxes came in a month businesses reported growth in activity for the first time this year, according to a closely-watched monthly survey, but jobs continued contracting.

KRA Commissioner-General Githii Mburu, who on Thursday blamed the measly 2.2 percent growth to Sh1.51 trillion in exchequer revenue for the year ended June 2020, has expressed optimism this financial year’s performance will be better.

The collections were largely hammered by Covid-19 containment measures, Mr Mburu said. “Traditionally, the review month (July) has been a slow month in ordinary revenue mobilisation and as such, untangling the Covid-19 impact on the actual out turn would be a daunting affair,” analysts at Genghis Capital said in a note on Friday.

July, however, marked the first month since December 2019 that companies reported significant increment in sales, although economists have warned the Covid-19 uncertainty remains elevated.

“The economy on aggregate is still depressed as some aspects are still pushing along, almost like a car in third gear and others like tourism and hospitality have taken a hit and are still stalled,” head of financial services and risk advisory at EY East Africa Robert Nyamu said on August 3.