KRA surpasses one trillion shillings in revenue collection amidst economic challenges
Kenya Revenue Authority (KRA) has announced a significant milestone, revealing that it has achieved a revenue collection of over one trillion shillings as of December 8th this year.
Kenya Revenue Authority (KRA) has announced a significant milestone, revealing that it has achieved a revenue collection of over one trillion shillings as of December 8th this year. The acting commissioner of strategy at the authority, Alex Mwangi, highlighted that this growth in revenues reflects a substantial 12.5 per cent rise compared to the Sh857 billion recorded in the same period last year.
Despite this commendable performance, the tax authority acknowledged facing challenges stemming from various key economic indicators. Factors such as a depreciating shilling and high interest rates were noted as potential impediments to the revenue mobilization efforts.
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In terms of import values, there was notable growth in Kenya Shilling terms, with a 36.0% increase in November 2023 and an 11.0 per cent rise from July to November 2023. However, when measured in dollar terms, the growth for the month was more subdued at 9.0 per cent, and a cumulative decline of 9.2 per cent was recorded.
The revenue performance was further affected by a slowdown in domestic demand, indicated by the Purchasing Managers Index (PMI), which averaged at 47.18 points in July to November 2023, down from 48.66 points in the same period the previous year.
The authority also highlighted the impact of tight financial markets marked by increased lending and interbank rates, leading to a slowdown in credit extension, particularly to the private sector. This, in turn, resulted in a 4.9 per cent decline in bank profitability as of September 2023.
Despite these challenges, Customs recorded the second-highest monthly collection in the history of KRA, with revenue collections amounting to Sh72.116 billion. The impressive performance is attributed to oil taxes, which collected Sh27.943 billion, indicating a growth rate of 42.5 per cent over the same period in the previous financial year.
Domestic taxes also showed positive growth, amounting to Sh108.174 billion in November 2023, reflecting a revenue increase of 14.7 per cent over the figures from November 2022. Looking ahead, the KRA has set a target to collect Ksh.2.787 trillion by the end of the Financial Year 2023/2024.
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