The Kenya Revenue Authority (KRA) set its own target for revenue collection for the month of January 2021, smashed the target, and congratulated itself, with the collection indicating businesses are starting to come back to normal.
KRA collected 142 billion shillings against a target of 138 billion shillings representing 6.7 percent growth over the same period last year. The tax collector has been falling behind in tax collection targets with the blame being on corrupt officials and tax evasion.
At the same time, the tax collector reported a 102.6 percent stellar revenue performance on Monday surpassing its January target by 3.53 billion shillings. January was the second month running that KRA posted an improved and above target performance since Covid-19.
In December, KRA collected 166 billion shillings against a target of 164 billion shillings representing 3.5 percent growth over the same period in 2019. KRA says it hopes to continue the trend going forward.
The improved performance has been attributed to the economic recovery following the relaxation of the COVID-19 containment measures and enhanced compliance efforts by KRA.
These included the reversal of; VAT rate from 14 percent to 16 percent; PAYE top marginal rate from 25 percent to 30 percent; Corporation Tax rate to 30 percent from 25 percent, among other policy initiatives. The revision of these tax rates meant an increase in the revenue that KRA collects.
Kenya is currently moving on the wheels of debts that are threatening to choke her to death. According to International Monetary Fund (IMF) records, Kenya currently owes 10.4 trillion shillings, above the ceiling of 9 trillion shillings set by the Senate.
The National Assembly is contemplating raising the ceiling by a further 3 trillion shillings to 12 trillion shillings to enable the Jubilee government to borrow more. Having smashed the first ceiling, the 12-trillion one might just be a walk in the park for them.
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