Taxman beats target, rakes in Sh228bn in the first quarter

KRA Commissioner-General John Njiraini. Photo/FILE

In Summary
KRA says success was achieved on account of reforms undertaken in the collection systems and growth in various sectors of the economy
Kenya Revenue Authority projects to collect Sh973 billion this year

 By MWANIKI WAHOME
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The taxman surpassed the revenue collection targets for the first quarter of the current financial year on account of reforms undertaken in the collection systems and growth in various sectors of the economy.

Data released by the Kenya Revenue Authority on Monday showed total revenue collected in the period rose by 28 per cent to Sh228.4 billion against a target of Sh224.8 billion.

“Revenue collection this year is strong across the board compared to last year when we started from a weaker position. We have seen reversal of this and for Value Added Tax there is strong growth due to reforms,” KRA commissioner-general John Njiraini said.

During a similar period last year, KRA collected 168.9 billion.

The target for revenue collection this year is Sh973.5 billion, out of which Sh912.3 billion is exchequer revenue and Sh61.2 billion is agency revenue — fee paid for collection of revenue on behalf of other government entities.

KRA is optimistic that the targeted revenue collection will be achieved given the enactment of the Value Added Tax (VAT) Act and reversal of excise duty remission on containerised beer.

“The fact that we are ahead of the target does not mean we will work less hard but intend to push hard to perform beyond the target,” Mr Njiraini said.

He added: “We expect to benefit from the VAT Act, which came into effect last month and the reversal of excise duty remission on containerised beer like Keg. These are going to have a positive impact on revenue collection.”

Revenue collection in the first quarter defied rising inflation rates, depressed imports value and a slower growth during the period under review.

CUSTOM SERVICES

The gross domestic product (GDP) grew at a slower pace of 4.3 per cent against the projected 5.9 per cent while imports registered 3 per cent growth against the target of 14 per cent.

Customs services recorded Sh80.9 billion compared to the target of Sh79 billion while large tax-payers office realised Sh101.3 billion against the targeted Sh99.5 billion.

Medium and small taxpayers recorded the targeted amount of Sh45.3 billion. Total domestic taxes that provided the bulk of taxes grew to Sh146 billion against the Sh144.8 billion target.

Road transport had the least contribution of Sh900,000 against a Sh1 billion target while trade taxes grew to Sh59.5 billion compared to Sh44.2 billion in the same period last in 2012.

Among the reforms that KRA has undertaken to boost revenue collection is employment of 300 officers to enforce use of electronic tax registers for VAT-registered businesses and enable the owners of businesses to cross-check revenue stamps on products sold to them.

The tax collector is expected to launch i-tax this month to enable more people to pay their taxes online through bank transactions.

So far, 15 banks have enrolled to allow their customers to register, file and generate payment through e-slips.

An SMS pilot project is ongoing to enable taxpayers get information regarding their transactions such as motor vehicle log book status and clearing agent status. Others are integration of National Single Window with the SIMBA system to enable business owners have more efficient transaction processing.