KRA quarter one tax collections down 15 per cent at Ksh.317.7 billion


KRA quarter one tax collections down 15 per cent at Ksh.317.7 billion
KRA offices in Nairobi's Times Tower. PHOTO | COURTESY

In Summary

  • The slump in tax collections is largely attributable to the COVID-19 pandemic hit on various tax heads including excise duty and income taxes.
  • While recent government actions to ease restrictions has injected confidence to the business operating environment, a looming return to restrictions occasioned by a steady rise in the number of new COVID-19 infections has caused agony in the economy deeming prospects.
  • To ease the burden on the tax man, the National Treasury has lowered KRA’s annual tax targets to June 30, 2021 by Ksh.66 billion to Ksh.1.568 trillion.

Kenya Revenue Authority (KRA) tax collections through the first quarter of the 2020/21 financial year have fallen by 15 per cent to Ksh.317.7 billion.

This from a total of Ksh.151 billion at this time last year according to data from the just issued National Treasury statement on actual revenues and net exchequer issues as at September 30, 2020.

The slump in tax collections is largely attributable to the COVID-19 pandemic hit on various tax heads including excise duty and income taxes.

During the first quarter, the continued stay of COVID-19 related restrictions including the closure of bars and entertainment joints put a strain on KRA’s tax basket as economic activity remained subdued.

Tax collected during the month of September was for instance down 14.2 per cent to stand at Ksh.129.6 billion from Ksh.151 billion in September 2019.

Non-tax revenue collections which encompass proceeds from fees, fines and other form of penalties however provided some respite for the tax man having doubled in the period to Ksh.24.9 billion from a flat Ksh.12 billion last year.

Cumulatively, ordinary revenue (tax + non tax collections) stand at Ksh.342.6 billion at the close of September or an equivalent 11 per cent down from last year’s combined Ksh.384.3 billion.

KRA’s annual revenue collection is expected to continue taking a hit as the pandemic maintains a stranglehold on its ability to funnel proceeds in an uncertain economic environment.

While recent government actions to ease restrictions has injected confidence to the business operating environment, a looming return to restrictions occasioned by a steady rise in the number of new COVID-19 infections has caused agony in the economy deeming prospects.

To ease the burden on the tax man, the National Treasury has lowered KRA’s annual tax targets to June 30, 2021 by Ksh.66 billion to Ksh.1.568 trillion.

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Story By Kepha Muiruri
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