KRA collects Ksh132.1 billion in April

The Kenya Revenue Authority (KRA) collected Ksh 132.1 billion in April 2016. According to the tax collector, this is the highest they have ever collected in its history.

The collection amounts to amount to 14.7 per cent growth compared to the same time in 2015.

KRA Commissioner General John Njiraini attributes the growth in revenue by growth in PAYE and other taxes, at 15.8 percent and 20.1 percent respectively.

The cumulative 10 month growth to April stood at 12.1%, up half a percentage point from the 11.7percent posted on 31st March 2016.

Total revenue collected by end of April 2016 is KSh 974.5 billion, up 105.4 billion from the same time in 2014/2015 FY.

As the 2015/16 FY comes to an end, KRA’s total revenue crossed the one trillion mark in the same month.

According to Cytonn Investments, KRA has recorded a deficit in the revenue collection budget, having missed the target by Kshs 255.5 billion, assuming a pro-rated basis.  The analysts states that the deficit in tax collection will be offset by the excess local borrowing and therefore we do not foresee any significant pressures to fund the budget in the current fiscal year.

Read: KRA registers 2.2 million taxpayers on iTax

“With one month left to the end of the current fiscal year, the government has surpassed its local borrowing target which will go towards plugging the deficit by KRA tax collection and will look to shift their attention to achieve the foreign borrowing target and start front-loading for the next fiscal year.”

Read: Kenya Sets FY2016/17 Budget Deficit to 9.3 percent Starting July.

To meet KRA’s revenue target for the financial year 2016-17 set at Sh1.3 trillion, KRA in April said there will be no more manual PAYE returns and all persons will be required to file their returns on iTax.

However, payment from banks dropped with KSh 11.4 billion having been paid in April 2016, compared to 12.3billion in April 2015, reflecting 8 percent drop, due to bad loans.

KRA has been leveraging on information technology to drive enhanced and efficient revenue collections.

KRA has leveraged information technology such as the 2005 Simba Customs System which was upgraded at a cost of KSh 1.Billion and the ubiquitous iTax platform, to drive enhanced and efficient revenue collections. iTax has, for example, made it difficult for taxpayers who previously evaded tax to transact with tax compliant taxpayers.

One of the other initiatives that were adopted to enhance VAT collections was withholding VAT (WHVAT).