The Kenya Revenue Authority (KRA) has posted a 4.5 percent revenue collection growth in the financial year 2024/2025 as of 31st December 2024.
The taxman collected Kshs 1.243 trillion compared to the collection of Kshs 1.189 trillion realized in the same period of the previous financial year (2023/2024).
Exchequer revenue (collected on behalf of The National Treasury) collection amounted to Kshs 1.120 trillion while Agency revenue (collected on behalf of other Government entities) amounted to Kshs 122.872 billion, registering a performance rate of 121.3% against a target of Kshs 101.316 billion.
Despite the progressive growth, the collection was affected by various economic indicators that directly drive revenue collection.
For instance, GDP growth slowed to 4.0% in the third quarter of 2024, down from 6.1% in the third quarter of 2023, and 4.6% in the second quarter of 2024.
Further, low domestic demand was experienced as indicated by the Purchasing Managers Index (PMI) which averaged 49.2 points in July – December 2024 indicating a contraction in economic activities.
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This is also indicative of the decline in overall import values of goods by 0.6% in the six months of 2024/25, which is a main source of both raw materials and final consumer goods.
Furthermore, the Government being a key consumer of VATable goods applied austerity expenditure measures that negatively affected various key sectors over time.
Cumulatively (July – December 2024), Customs revenue collection amounted to Kshs 429.127 billion, a growth of 4.8% over Kshs 409.548 billion realized in the same period of FY 2023/24.
Domestic taxes amounted to Kshs 811.847 billion in July – December 2024, translating to a revenue growth of 4.4% over Kshs 777.617 billion realized in July – December 2023.
Import value declines were recorded from Foods & Beverages (21.5% decline), and Fuels & Lubricants (17.7% decline). These two broad categories of goods account for slightly over â…“ of import values.
KRA targets to collect 2.684 trillion by the end of the Financial Year 2024/2025. The taxman is confident that it will continue with the upward trajectory and achieve the set target to enable the government to sustain the country’s economy.
