The Kenya Revenue Authority (KRA) has achieved a historic milestone, collecting Sh2.112 trillion in tax revenue by April 30, 2025 ust ten months into the 2024/2025 financial year. This marks the first time the Authority has surpassed the Sh2 trillion mark within this timeframe, demonstrating strong progress in revenue mobilisation despite challenging economic conditions.
According to KRA, this performance represents a 96.5% achievement of its Sh2.189 trillion target for the period. Year-on-year, this reflects a 6.1% growth compared to the Sh1.990 trillion collected during the same period in the previous financial year.
Domestic taxes contributed the bulk of the revenue at Sh1.386 trillion, a 4.7% increase from Sh1.323 trillion collected the previous year. Customs revenue also performed strongly, growing by 9.1% to Sh722.7 billion, up from Sh662.4 billion. Agency revenue, collected on behalf of other government institutions, registered the highest percentage growth at 37.1%, reaching Sh205.5 billion and surpassing its target by 11.8%.
Exchequer revenue stood at Sh1.906 trillion, reflecting a 95% performance rate against the target and a 3.6% rise from the same period last year.
Despite the gains, KRA cited several economic headwinds that affected revenue collection. Kenya’s GDP growth slowed to 4.0% in Q3 2024 from 6.0% the previous year. Private sector activity also contracted, with the Purchasing Managers Index averaging 49.8. Imports and exports declined by 1.6% and 3.6% respectively, while high commercial bank lending rates and a stronger shilling further constrained economic activity.
Additionally, tax offsets through adjustment vouchers worth Sh53.8 billion, and policy shifts such as treating Social Health Insurance Fund (SHIF) and Housing Levy contributions as allowable deductions, dampened PAYE collections.
To address these challenges, KRA introduced several initiatives including the Centralised Release Office to enhance customs clearance and the Electronic Rental Income Tax System (eRITS) to streamline rental income tax compliance. The ongoing Tax Amnesty Programme has also brought in Sh13.5 billion in revenue while waiving Sh164.9 billion in penalties and interest, benefiting over three million taxpayers.
KRA’s robust performance underscores its continued commitment to expanding Kenya’s tax base and enhancing compliance.
