Tax collection up by a third to Sh125.4b

Revenue collection dipped at the height of the Covid-19 pandemic. [Courtesy]

The Kenya Revenue Authority (KRA) collected Sh125.4 billion in taxes in August, stretching its good run since June when it surpassed its target.

This was an increase by over a third compared to Sh92.8 billion collected in the same month last year, the latest data from National Treasury shows.

Government officials have sought to show that KRA’s impressive performance is a reflection of a rebound in the business environment, with data from the Kenya National Bureau of Statistics showing growth in most of the leading economic indicators.  

In the first two months of the financial year 2021-22, the taxman collected Sh247.2 billion, which was a jump of 32 per cent from Sh187.25 billion in August last year.

Revenue collection dipped at the height of the Covid-19 pandemic last year, forcing Treasury to plug the deficit through borrowing.

Rispah Simiyu, the KRA Commissioner for Domestic Taxes, said early this month that besides sealing loopholes and improving efficiency, the taxman convinced several taxpayers to come to the negotiating table, which unlocked money held by disputes.

“Apart from the fact that we were collecting taxes even on a reduced economy, there were very many disputes either at the tribunal or in the court process,” she said.

“For those who heeded the call, they came to the table and we unlocked the revenue.”

In total, the Exchequer received Sh457.1 billion, which also included domestic loans of Sh200.3 billion from Treasury bonds and bills.

About 65 per cent of the taxes collected went to repay loans, with Treasury using Sh162 billion to service maturing debts.

Salaries and other recurrent expenses took Sh159 billion while development got Sh32.8 billion.