By James Anyanzwa

The Kenya Revenue Authority (KRA)’s first quarter (July-September) collections fell below target by three per cent.

The taxman collected Sh124 billion against a target of Sh127.8 billion, a performance rate of 97 per cent.

These revenues, however, still constituted an increase of Sh15.2 billion over a similar period last year, representing a 13.9 per cent growth.

According to official figures released by KRA on Friday, the Customs Services Department (CSD) collected Sh44.9 billion, against a target of Sh52.1 billion, denoting a performance rate of 86.1 per cent.

KRA attributed the revenue underperformance in CSD to tax waivers, and exemptions on imports occasioned by drought and global financial crisis, zero-rating of commodities as contained in the 2009/10 Finance Bill, and the new criteria of computing VAT for goods benefiting from import duty remissions.

The Domestic Taxes Department (DTD) realised Sh78.5 billion against a target of Sh74.7 billion, registering revenue surplus of Sh3.8 billion or a performance rate of 105.2 per cent.

The DTD recorded the highest revenue growth of Sh12.5 billion or 19 per cent compared to a similar period last year.

The Road Transport Department pulled in Sh0.6 billion against a target of Sh1 billion, a performance rate of 58.8 per cent.

During the period KRA collected Sh362 million from 35,125 newly recruited taxpayers.

Mr Michael Waweru, KRA’s commissioner general, however, attributed the grim tax collection to slowed economic performance during the three months period.

"Economic performance in the first quarter of the financial year 2009/10 was characterised by slowed performance by key sectors," Waweru said.

In a statement, Waweru pointed out that key sectors such as agriculture and energy (particularly electricity sector) recorded subdued performance leaving tourism, hotels and restaurants, transport and communications sectors to drive economic growth.

The authority is, however, optimistic of reversing the underperformance in the second quarter of 2009/10, to ensure the cumulative target is surpassed by the end of financial year 2009/10.