Fuel levy hike pushes KRA’s road levy collections to record Sh119.7 billion

A worker fills the tank of a motorcycle at a petrol station in Nairobi on May 17, 2023. (Photo: Simon Maina/AFP)

By Lucy Mumbi
Thursday, July 17, 2025

According to KRA, the 50.9 per cent surge in RML collections was driven by the levy adjustment from Sh18 to Sh25 per litre, coupled with increased oil volumes.

The government’s move to hike fuel levy by Sh7 per litre saw the Kenya Revenue Authority (KRA) collect a record Sh119.7 billion from the Roads Maintenance Levy (RML) in the 2024/25 financial year, marking the highest growth among all revenue streams in 2024/25.

According to the Authority, the 50.9 per cent surge in RML collections was driven by the levy adjustment from Sh18 to Sh25 per litre, coupled with increased oil volumes.

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“The growth in RML is attributed to an increase in the applicable rates from Sh18 per litre to Sh25 per litre,” KRA said, noting that oil volumes grew by 13 per cent in the July 2024 to June 2025 period, largely from petrol, diesel and other petroleum products.

Petrol volumes rose by 10.7 per cent, diesel by 13.8 per cent, and other oil products, including coal, electrical energy, and lubricating greases, grew by 13.7 per cent.

Overall, the KRA’s Customs and Border Control (C&BC) Department surpassed its revenue targets, collecting Sh879.329 billion at a performance rate of 105.9 per cent during the 2024/25 financial year. This translates to an average daily collection of Sh3.5 billion, with the department recording an accelerated growth rate of 11.1 per cent, more than double the 4.9 per cent achieved the previous year.

“This marks an accelerated growth rate of 11.1 per cent compared to the previous year’s 4.9 per cent,” Commissioner for Customs and Border Control Lilian Nyawanda said.

The performance was driven by growth in both non-oil and oil tax collections. Non-oil taxes rose by 10.3 per cent to Sh541.053 billion, while oil taxes grew by 12.5 per cent to Sh338.276 billion.

KRA further reported that during the third quarter, customs revenue performance hit 109.2 per cent, with January 2025 posting a historic high monthly collection of Sh82.554 billion and a record performance rate of 121.1 per cent.

In the year under review, import duty grew by 18.3 per cent to Sh157.870 billion, largely supported by strong performances in the agriculture and steel sectors, which recorded growth rates of 67 per cent and 39 per cent respectively. Excise duty also registered growth of 11.6 per cent, contributing Sh125.3 billion.

Collections from the Railway Development Levy (RDL) grew by 15 per cent to Sh36.820 billion.

The Authority highlighted that a 37.4 per cent reduction in exemptions on imports, including sugar, rice and cooking oil, also boosted non-oil revenue collections.

On enforcement, KRA reported that it intercepted illicit goods valued at Sh549 million during the year. According to Nyawanda, this was achieved through stringent scanning of imports and the use of data analytics in risk management and taxpayer profiling.

“Among the notable enforcement actions that were taken during FY 2024/25 was the seizure of over 40,000 litres of smuggled products,” she said.

KRA’s crackdown on contraband imports and sealing of illicit trade loopholes yielded notable growth, especially in the Western and Rift Valley regions, where collections from ports and bonded facilities grew by 15 per cent and 17 per cent, respectively.

The enforcement of motor vehicle import regulations led to a 0.8 per cent increase in revenue per vehicle. Additionally, the introduction of centralised clearance processes reduced the time taken to clear cargo by 62 per cent, from 110 hours to just 42 hours.