Kenya Revenue Authority misses annual tax target by KSh 354 billion

– According to an analysis of the National Treasury statements, the collection stood at KSh 1.453 trillion against an original estimate of KSh 1.807 trillion

– Funds collected from March to June when the virus had been confirmed in Kenya for example fell short by KSh 81.5 billion compared to a similar period in 2019

– In April, President Uhuru Kenyatta signed a new tax law that amended several statutes to cushion the economy and Kenyans against the effects of the COVID-19 pandemic

The Kenya Revenue Authority (KRA) has missed its annual tax collection target by KSh 354 billion, a shortfall attributed to the dwindling economy that has been worsened by the effects of the COVID-19 pandemic.

According to an analysis of the National Treasury statements, the collection stood at KSh 1.453 trillion against an original estimate of KSh 1.807 trillion.

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The National Treasury head offices in Nairobi. Photo: Treasury.
Source: Facebook

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The figure however, is just KSh 12.7 billion shy of revised estimates of KSh 1.466 trillion after readjustment was done following the outbreak of the pandemic.

Funds collected from March to June when the virus had been confirmed in Kenya for example fell short by KSh 81.5 billion compared to a similar period in 2019.

KRA once again missed the mark in expected revenue mobilisation. Photo: BD.
Source: UGC

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The taxman and exchequer had warned of reduction in collections in the months to June as the economy was already in its knee before the pandemic set foot halting operations.

During the period, total external loans and grants stood at KSh 299.7 billion against a target of KSh 301.3 billion.

Gross domestic borrowing on the other hand was at KSh 558.9 billion against a raised threshold of KSh 664.4 billion leaving total revenue and financing at an estimated KSh 100 billion shy of the mark at KSh 2.6 trillion.

Treasury CS Ukur Yatani said total disbursements to counties including conditional grants and loans stood at KSh 316 billion against a KSh 347.9 billion revised target. Photo: Ukur Yatani.
Source: Facebook

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In April, President Uhuru Kenyatta signed a new tax law that amended several statutes to cushion the economy and Kenyans against the effects of the COVID-19 pandemic.

The amended law lowered the value added tax rate from 16 to 14%, and also included the raise in the threshold for turnover tax to between one million and fifty million shillings so as to exclude small-scale traders from the presumptive tax.

The amended law also targeted low-income earners and included a 100% pay as you earn (PAYE) tax relief for employees earning less than KSh 28,000 per month.

The move meant the government would collect less revenue than expected even as the president took action to protect vulnerable Kenyans.

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