This archive report was first published on 3 July 2021.
On July 3, 2021, the Kenya Revenue Authority (KRA) announced a record Sh1.7 trillion revenue collection in the 2020/2021 financial year, surpassing the Sh1.6 trillion it collected in 2019/2020.
KRA Commissioner Githii Mburu attributed the success to the agency's ability to surpass its target collection for the first time in 8 years, by Sh16.08 billion. The target had been set at Sh1.65 trillion as stated in the 2021 Budget Policy Statement.
According to Mburu, the FY 2020/2021 revenue target as reflected in the 2021 Budget Policy Statement was Sh1.652 trillion, which KRA surpassed with a surplus of Sh16.808 billion. This represents a performance rate of 101 per cent and revenue growth of 3.9 per cent compared to the last Financial Year.
Domestic excise collections posted a growth of 12 per cent, while domestic VAT performance recorded a decline of 7.9 per cent primarily affected by the COVID-19 pandemic. Withholding tax, however, recorded a growth of 3.8 per cent in FY 2020/21.
Corporation tax grew by 3.7 per cent, with key sectors meeting or exceeding their targets. Energy, Agriculture, and construction sectors posted a growth of 22.7, 33.1, and 31.9 per cent respectively. Payroll taxes, however, experienced a decline of 9.3 per cent due to a reduction in the employment rate.
The KRA tax collection boost has been attributed to the implementation of several revenue enhancement measures, including nabbing tax cheats and widening its tax base through the Digital Services Tax, Minimum Tax, and Voluntary Tax Disclosure. The introduction of Alternative Dispute Resolution (ADR) also ensured faster, objective, and efficient resolution of tax disputes, unlocking Sh31.435 billion in taxes.
Under the 2021/2022 fiscal year, KRA is expected to collect at least Sh1.8 trillion up from a target of Sh1.6 trillion set in 2020.
