The Kenya Revenue Authority (KRA) has exceeded its revenue target for the 2024/2025 fiscal year, collecting a total of Ksh 2.571 trillion against a target of Ksh 2.555 trillion.
This reflects a performance rate of 100.6%, marking a notable year-on-year growth of 6.8% compared to the Ksh 2.407 trillion collected in the previous fiscal year.
In a public briefing on the outcome, Commissioner General Humphrey Wattanga acknowledged the Authority’s resilience in achieving this result despite numerous economic disruptions in the first half of the year.
“The first half of the fiscal year faced significant macroeconomic headwinds, including the suspension of the Finance Bill 2024, high interest rates, ongoing global trade frictions, and regional conflicts,” Wattanga said.
Revenue Components Show Mixed Performance
KRA reported that exchequer revenue, the core tax revenue collected for the national government, increased by 4.5%, totaling Ksh 2.32 trillion compared to Ksh 2.22 trillion in FY2023/24.
In contrast, agency revenue—taxes collected on behalf of other government bodies—recorded a significant leap. The Authority collected Ksh 248.28 billion, far exceeding the Ksh 40.47 billion target, representing a staggering 119.5% performance rate.
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Customs, VAT, and PAYE Drive Gains
Customs revenue emerged as one of the top performers, contributing Ksh 879.33 billion, which is 11.1% higher than last year and represents a 105.9% performance rate against the Ksh 830.37 billion target.
KRA attributed this success to improved compliance efforts and monitoring of border transactions.
Domestic VAT collections increased by 4.2%, bringing in Ksh 327.34 billion, aided by targeted enforcement measures in the second half of the fiscal year.
“VAT compliance measures—including stricter registration controls and declaration audits—enabled us to close several leakages,” Wattanga noted.
Sector-Specific Contributions and Corporate Tax Movement
The report showed Pay-As-You-Earn (PAYE) income tax grew by 3.3%, totaling Ksh 560.96 billion, with a 99% performance rate.
Corporation Tax, on the other hand, brought in Ksh 304.83 billion, a 9.9% rise compared to the previous year, but still below the Ksh 321.08 billion target. Sectors such as ICT, manufacturing, real estate, financial services, and wholesale/retail trade were cited as key drivers of the increase.
Domestic excise taxes closed the year at Ksh 69.39 billion, achieving a 97.2% performance rate, while excise duty from betting services notably exceeded expectations at 117.2% performance, generating Ksh 13.23 billion.
Looking Ahead: A Call for Fiscal Stability Through Tax Efficiency
KRA’s strong performance in FY2024/25 underscores the importance of broadening the tax base and enforcing compliance, especially in a high-debt environment where tax revenue is critical for national development.
As Kenya continues to advance digitalisation and enforce sector-specific tax rules, stakeholders anticipate a more predictable and efficient tax administration in the upcoming fiscal year.
