Kenya Revenue Authority collection target raised to $16 billion to tame borrowing


By Brian Ngugi | Business Daily, Kenya September 27, 2017

The Treasury has raised targets for the taxman in the next financial year as it plans to stabilise its debt and consolidate economic growth, newly published estimates show.

The Kenya Revenue Authority (KRA) is expected to collect Sh1.69 trillion in the next financial year up from Sh1.47 trillion in the current financial year ending June.

The higher revenue target comes despite the fact that the taxman has consistently missed his quarterly revenue targets in the previous financial year even as recurrent expenditure continues to rise, putting a strain on public coffers.

The national budget grew to Sh2.6 trillion in the current financial year from Sh2.48 trillion in the previous year, an increase that must be financed by additional tax revenues or debt.

“Ordinary revenues will amount to Sh1.69 trillion (16.9 per cent of GDP) in the Financial Year 2018/19 up from Sh1.47 trillion (16.9 per cent of GDP) in Financial Year 2017/18,” says the Treasury in the 2017 Budget Review and Outlook Paper. Ordinary revenue is mainly, but not exclusively, tax revenue.

The Treasury says revenue performance will be underpinned by on-going reforms in tax policy and revenue administration to enhance yields, promote compliance and facilitate private sector growth and development.

The taxman has been under pressure from the Treasury to collect more revenue. “In my Budget Statement in March 2017, I spelt out measures that provide for equity in tax collection, promotion of local industries, attract FDIs and encourage re-investments. Therefore, we expect improved revenue collection in the current financial year 2017/18 and going forward,” said Treasury secretary Henry Rotich. Revenue collection for the financial year ended June 2017 fell short by 0.8 per cent.

KRA said it collected a record Sh1.365 trillion in the 12 months against a target of Sh1.376 trillion set by the Treasury.

The collections were 13.8 per cent more than the Sh1.21 trillion received the previous year, largely attributable to increased inflows from consumption taxes.

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