KRA Surpasses Collection Target for January 2021

The Kenya Revenue Authority has surpassed its collection target for the second consecutive month, in signaling economy recovery.

The data from the taxman shows a collection of  Sh142 billion in January, against a target of sh138 billion, a 6.7% growth compared to same period last year.

The performance rate was 102.6 per cent surpassing the agency’s target for the first month of the year by Sh3.53 billion.

In December, the revenue agency collected more than Sh166 billion in taxes, surpassing the Sh164 billion target – a performance rate of 101.3%.

KRA attributed the strong performance to the relaxation of the stringent Covid-19 containment measures, the implementation of the Post Covid-19 economic recovery strategy 2020-2022 by the government and the sustained implementation of enhanced compliance efforts by KRA in the month of January 2021.

Throughout the month, taxes on international trade boosted the collections of the Customs and Border Control Department to  Sh54.9 billion, a 9.7 per  and a revenue surplus of Sh6.053 billion.

According to KRA Commissioner General James Mburu, the customs revenue was achieved through a sustained daily average of non-oil revenue at Sh1.7 billion compared to Sh1.744 billion in December 2020, which was the highest ever daily average collection for customs revenue.

Meanwhile, Domestic Taxes Department registered a 97.1 per cent improvement in target performance, narrowly missing out on the monthly target. However, the return was the best since the start of the Covid-19 pandemic in March last year . The department also recorded an improved growth of 5 per cent in January this year after experiencing a 10 4 percent decline in December 2020

Elsewhere, excise domestic taxes recorded a growth of 42.8 per cent after collecting a surplus of Sh3.422 billion, while withholding tax surpassed the target by Sh396 million, a growth of 8.2 per cent.

Pay As You Earn (PAYE) taxes registered a strong performance at 98.6 per cent, reflecting a surge in employment coming into the new year.

Corporation taxes, imposed on resident companies, posted a revenue collection growth of 44.4 per cent, a performance rate of 119.4 per cent against the target and an improvement from December 2020 performance rate which stood at 93.5 per cent.

The Value Added Tax (VAT) domestic remittances increased by 8.5 per cent. This was a huge recovery in the face of the 19.8 per cent  decline reached in December 2020. The performance is expected to further improve as businesses recover from the Covid-19 pandemic and continue to convert purchases to sales

The pandemic which was first reported in Kenya in mid-March almost crippled social economic activities in the country, hurting KRA’s collection plan in the process.

The agency missed a half-year tax collection target by Sh109.9 billion as Covid-19 disrupted economic activities.

“With a positive forecast on the economic growth which is projected to bounce back at 6.4% in 2011 from the projected growth of 0.6% in 2020, KRA remains positive on the response of revenue to the economic resurgence.” Mburu said.

The taxman says that the agency will continue building compliance enforcement efforts by driving the implementation of new tax measures including digital service tax, minimum alternative tax, and voluntary disclosure programme.

KRA is expected to collect at least  Sh1.56 trillion by end of June.