Premium

KRA's headache to raise Sh535b in 60 days amid weak economy

Taxman needs to collect Sh268 billion every month to hit Sh2.1 trillion target. [File, Standard]

The taxman is faced with the herculean task of collecting Sh535 billion in just 60 days, new data from the National Treasury shows.

This is to enable the government to hit its revenue target of Sh2.1 trillion for the current financial year ending June 30. Data released by Treasury on Friday, May 12, shows Kenya Revenue Authority had collected Sh1.57 trillion by the end of April.

KRA, which is undergoing reorganisation and seeking a substantive commissioner general, needs to collect at least Sh267.5 billion in each of the two remaining months, or Sh8.91 billion every day.

President William Ruto, KRA Chairman Anthony Mwaura and acting Commissioner General Rispah Simiyu earlier said they were confident of hitting the target.

Gruelling task

But it would be a gruelling task to hit the target in the remaining period amid a slowing economy, based on the recent trend of tax collections.

This could mean the Ruto government is on the brink of missing its revenue collection target for the current financial year, which could morph into a financial crisis for the already cash-strapped government.

KRA had collected Sh1.39 trillion by the end of March this year, earlier data showed. This means it collected Sh179 billion in the month of April.

Going by the trend, it will be an uphill task to collect Sh267.5 in each of the remaining months.

President Ruto is under immense public pressure to expand the economy and create new jobs and fulfill election promises.

The new team at KRA has been under pressure from the Kenya Kwanza administration to seal revenue leaks through corruption and boost State coffers to enable Treasury to stop relying on debt.

Ruto last year, for instance, put KRA staff on notice amid claims that some of them colluded with tax evaders.

He indicated that other than taxpayers' apathy, corruption within KRA had made it difficult for the government to collect revenues to its full potential.

"Revenue leakages, collusion between evaders and KRA officials to subvert revenue administration, a culture of raids, extortion, disruption of taxpayers' operations, and obstruction of business are some dimensions of a wrong culture, robbing our citizens of shared prosperity," the President said.

Ruto, who has spoken against incurring more debt to fund programmes, is banking on increased tax collections to reduce the need for borrowing and bridge the budget deficit his government estimates will be at Sh695.2 billion during the year.

KRA is expected to collect Sh2.57 trillion in the 2023-24 financial year, 17 per cent more than the it is projected to collect over the current financial year.

Ruto is banking on a host of new systems and radical changes at KRA to help achieve the targets and bring more Kenyans into the tax net.

During last year's Taxpayers Day, Ruto said it is possible to increase tax revenues by 100 per cent over the next five years.

Enterprise
Uncover successfully closes Sh180m seed funding round
Enterprise
How drones are taking over disaster frontlines, key sectors
Opinion
Collaboration, investment key to security of digital payments
Enterprise
Flowers for all seasons: Business woman thrives online