Tax surplus attributed to compliance by Kenyans
Tuesday January 18 2022
Taxpayers at the Kenya Revenue Authority’s Mombasa office. FILE PHOTO | NMG
Higher tax compliance among Kenyans has contributed to the collection of more than $470 million in surplus in the first half of the 2021/22 financial year by Kenya Revenue Authority (KRA).
The taxman has recorded $9.76 billion in tax collection against the set target of $9.29 billion, surpassing both its exchequer revenue and overall revenue targets in the last five months.
The voluntary tax disclosure programme brought in about $40 million in collections from 6,690 applications.
"Patriotic taxpayers keen on facilitating national development allowed KRA to collect a surplus of $470 million," KRA Commissioner General Githii Mburu said in a statement.
Mr Mburu said the good performance was primarily attributed to enhanced compliance efforts by the authority and economic recovery.
KRA also surpassed both its exchequer revenue and overall revenue targets in the last five months (from August to December 2021).
During the first half of the Financial Year, Customs revenue sustained its excellent performance after collecting $355 million against a target of $322 million, reflecting a revenue surplus of about $33 million.
The Customs revenue recorded growth of 19.5 per cent in the period under review. KRA attributes Customs revenue performance to 25.4 per cent growth in trade taxes and 9.6 per cent growth in petroleum taxes.
Domestic Taxes performance improved, with a 30.8 percent growth compared to a similar period last year.
The taxman collected $61.8 of domestic revenue against a target of $60 million representing a performance rate of 102.4 per cent.
Pay As You Earn (P.A.YE) registered a performance rate of 105.7 per cent in the first half after a collection of $22.1 million against a target of $20.9 million.
"The performance was mainly driven by gradual growth in employment and the emanating economic recovery," said the General Commissioner.
The Value Added Tax (VAT) collections amounted to $12.1 million, against a target of $11.9 million, recording a growth of 40.2 per cent.
During the period under review, corporation tax collection stood at $10.7 million, which is a growth of 17.3 per cent over the half-year.
KRA said the improved performance was driven by increased remittance from, agriculture, manufacturing, financial, wholesale & retail and transport sectors.
“The excellent revenue performance has been enhanced by the sustained implementation of key strategies as enshrined in KRA’s 8th Corporate Plan,” said Mr Mburu.
Some of the strategies which were attributed to the increase in tax collection include extensive use of data and intelligence to unearth unpaid taxes, use of technology to simplify tax processes, taxpayer engagements and education, and customer support programmes.