This archive report was first published on 18 July 2020.
Kenya Revenue Authority Misses Annual Tax Target by KSh 354 Billion ¶
According to an analysis of the National Treasury statements, the Kenya Revenue Authority (KRA) has missed its annual tax collection target by KSh 354 billion. The shortfall is attributed to the dwindling economy that has been worsened by the COVID-19 pandemic.
As of June 2020, the collection stood at KSh 1.453 trillion against an original estimate of KSh 1.807 trillion. This represents a shortfall of KSh 354 billion.
During the period from March to June, when the virus had been confirmed in Kenya, funds collected fell short by KSh 81.5 billion compared to a similar period in 2019.
President Uhuru Kenyatta signed a new tax law in April 2020 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 included a 100% pay-as-you-earn (PAYE) tax relief for employees earning less than KSh 28,000 per month.
Despite the government's efforts to protect vulnerable Kenyans, the move meant the government would collect less revenue than expected.
According to the National Treasury, total external loans and grants stood at KSh 299.7 billion against a target of KSh 301.3 billion. Gross domestic borrowing 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.
