Taxman exceeds revenue target to collect Sh964 billion

Kenya Revenue Authority Commissioner-General John Njiraini says the taxman was able to raise Sh100m more due to reforms in taxation. [PHOTO: JENIPHER WACHIE/STANDARD]

The Kenya Revenue Authority (KRA) has managed to surpass its revenue collection target by a modest Sh100 million, despite a difficult 2013/2014 fiscal year. The taxman exceeded the target, even after revising downwards the initial targets for the period, owing to low economic growth forecast and depressed import trends last year.

Data released by the authority yesterday shows the taxman collected Sh963.8 billion against a newly set target of Sh963.7 billion. This is due to lower than expected performance of the economy, which wiped out over Sh12 billion worth of projected revenue collections. The original annual revenue collection target for the fiscal year 2013/2014 was fixed at Sh973.5 billion.

The revised target represents a growth of 20.4 per cent over the previous year's (2012/2013) actual revenue collection of Sh800.5 billion. The bulk of the taxman's revenue during the period under review originated from domestic taxes, whose contribution to the overall revenues collected stood at Sh628.3 billion, accounting for 65.2 per cent.

small taxpayers

Large taxpayers put in Sh431 billion against a revised target of Sh439.7 billion, representing 44.7 per cent. This was followed by the customs services department at Sh331.8 billion (34.4 per cent), and the medium and small taxpayers at Sh197.3 billion (20.5 per cent). The road transport department performed poorly, generating a paltry Sh3.7 billion against an adjusted target of Sh4.4 billion. This accounted for 0.4 per cent of the overall revenue collections during the 2013/2014 fiscal year.

KRA also pursued landlords and managed to collect Sh2.1 billion from 400 landlords against a target of Sh4.4 billion, after some of them objected the move and sought legal redress. Though KRA had hoped to raise Sh10 billion from the 1,800 landlords, the authority was weighed down by capacity constraints to audit all the property owners.

Commissioner General John Njiraini said technology would be introduced to track down all landlords and ensure they pay taxes. "We have had some legal challenges but we are confident the problem will be resolved. We should be able to bring in technology to track the landlords," Njiraini told a media briefing in Nairobi yesterday.

 Better results

Mr Njiraini also attributed the improved revenue performance to reforms in the Value Added Tax (VAT) department whose contribution to total collection increased to 24.2 per cent from 22.9 per cent in the previous (2012/2013) fiscal year. "VAT has grown quite strong this year partly because of the reforms  we have undertaken," he said.

He said future interventions in the VAT department would be focused on customs under-valuation for previously zero-rated and exempt items and more taxpayer recruitment targeting key business outlets such as shopping malls. He said the slowdown in the disbursement of government funds adversely affected withholding taxes, especially for contractors. " Both PAYE and Corporation taxes performed well with the former buoyed by initiatives targeting county payrolls," said Njiraini.

Njiraini was upbeat about delivering revenue collection targets in the current (2014/2015) fiscal year through innovative practices, leveraging on technology and implementation of staff performance improvement measures. The government expects to collect Sh1.12 trillion in the 2014/2015 fiscal year comprising  Sh1.05 trillion in exchequer revenue and Agency revenue amounting to Sh65.5 billion.