KRA needs Sh400b in two months to meet its target

Outgoing Kenya Revenue Authority Commissioner General John Njiraini. (Photo: Standard)

The Kenya Revenue Authority (KRA) is supposed to raise Sh400 billion in the next two months to meet its annual target.

The taxman on average collects Sh98 billion per month in the last ten months, according to figures contained in the latest Gazette Notice of May 26, 2017.

However, latest revenue goals could prove difficult to meet. Since July last year, KRA managed to collect taxes worth Sh989.9 billion, against a 12-month target of Sh1.26 trillion, raising concerns over the perennial failure by KRA to meet Treasury’s target.

Without collecting enough taxes, the Government might be forced to increase its borrowing or even shelve some development projects.

In the period under review, total revenue stood at Sh1.56 trillion, with the Government borrowing standing at about Sh259 billion locally and Sh23.6 billion externally. Commercial loans accounted for Sh167.1 billion.

The country also received grants of Sh6.1 billion from foreign Government and International organisations.

However, grants from the Danish International Development Agency (DANIDA) of Sh422.3 million and a debt-swap of about half a million had not been received by the time the notice was published. DANIDA mostly funds the health sector which has been mired in corruption.

Already, its US counterpart, the United States Agency for International Development (USAID), which also finances the country’s health sector, has suspended its funding following revelations that Sh5 billion that might have been misappropriated by the sector.

Much of the revenue was gobbled up by recurrent expenditure- that is salaries and allowances, administrative costs to various ministries, pensions and gratuities or repayment of public debt.

About Sh989.3 billion went to recurrent expenditure. A paltry Sh277.3 went into development.

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