This archive report was first published on 21 August 2020.
Kenya Revenue Authority (KRA) has defied a tough operating period to record a 97% tax collection, but still falls short of the set projection by Sh275 billion.
Since taking office, KRA Commissioner General Githii Mburu has implemented aggressive tax collection strategies, including the exercise of stamp tax on drinks.
Despite this, revenue growth has been modest, with a 1.7% increase compared to last year's collection.
One area of concern is the VAT tax refund backlog, which has prompted KRA to seek increased allocations from the Treasury every month.
As of last month, KRA began paying out Sh10 billion in tax refunds to businesses as a way of cushioning them from the effects of the pandemic.
However, KRA has applied for an additional Sh2.8 billion in allocations to help cope with the increasing number and value of claims.
According to KRA, it has paid out Sh25 billion in VAT refunds in the year ended June, up from Sh14.1 billion in the 2018/19 period.
“KRA has sought an enhancement of monthly VAT refunds allocation from the current Sh1.2 billion to Sh3 billion from the National Treasury to help cope with the increasing number and value of claims,” the taxman said.
During the reading of the 2019/20 budget, the National Treasury gave KRA a Sh1.88 trillion tax revenue target, which was later revised to Sh2.1 trillion.
Despite these challenges, KRA has collected other monies, including Agency Fees amounting to Sh97.1 billion.
