KRA revenue hits Sh1 trillion amid tough economic challenges

NAIROBI, Kenya, Dec 11 – The Kenya Revenue Authority (KRA) has collected Sh1.03 trillion in revenue between July and December 8th, 2023.

High revenue is despite the depreciation of the Kenyan shilling among major global currencies such as the U.S. dollar, inflation, and weak demand, among others.

For example, between July and November, the Kenyan unit lost 22 percent of its value to the greenback.

“Revenue performance was also affected by low domestic demand as indicated by the slowed Purchasing Managers Index (PMI) that averaged at 47.18 points in July – November 2023 down from 48.66 points in July – November 2022,” KRA said in a statement.

“In particular, depressed aggregate demand is also noted in seemingly slow GDP growth,” KRA added.

“The tight financial markets marked by increase in lending rates and interbank rates, has slowed down credit extension, especially to the private sector, resulting into decline in Bank profitability by 4.9% as at September 2023.”

KRA links improved earnings to a rise in taxes collected from oil that grew to Sh27.94 billion, representing a 42.5 percent growth compared to a similar period last year.

“The good performance by oil taxes was mainly driven by growth in both overall oil volumes and values by 36.7% and 49.5% respectively,” the taxman stated.

“The growth was also driven by positive impact of tax policy which include the VAT rate change from 8% to 16% vide Finance Act 2023.”

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Similarly, domestic taxes went up to 108.17 billion as of November, a 14.6 percent jump in the review period.

KRA targets collecting Sh2.787 trillion by the end of the 2023–2024 financial year.

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