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Revenue hits Sh1.5tr in seven months of 2023/24 as KRA revs up collection

Monday, February 26th, 2024 02:34 | By
Revenue hits Sh1.5tr in seven months of 2023/24 as KRA revs up collection
National Treasury and Economic Planning Chris Kiptoo. PHOTO/Print

Kenya Revenue Authority (KRA) collected Sh1.499 trillion in revenues by the end of January 2024, according to the National Treasury and Planning.

The revenue collection for the seven-month period increased by 14.4 per cent compared to a growth of 9.8 per cent in the same period in fiscal year 2022-2023.

“Over the course of the fiscal year, revenue performance is anticipated to improve in light of improved tax administration,” the Principal Secretary at the National Treasury and Economic Planning Chris Kiptoo (pictured) said.

Kiptoo was speaking in Parliament last week during a meeting with the Departmental Committee on Finance and National Planning on processing of the 2024 budget policy statement.

Financial policies

He said the government has put up an elaborate plan to promote economic transformation for shared growth through formulation, implementation and monitoring of prudent economic and financial policies at national and county levels of government.

The PS said the government has provided a conducive environment to ensure low and stable inflation and interest rates, as well as stable exchange rate and improve mobilization and management of external resources.

Similarly, he added, the Treasury will work to manage public debt efficiently and effectively, optimise cash management and effectively administer the government’s financial system and enforce proper management.

Other goals targeted are control and accounting of public funds and provide independent, objective assessments of the soundness of risk management strategies and practices, management control frameworks, systems and practices.

Kiptoo said over the next four years, the government will scale up efforts on policy and structural reforms under the Bottom-Up Economic Transformation Agenda (BETA) in order to navigate the global turbulence and accelerate economic recovery.

This will also help address overarching development challenges namely creating jobs, eradicating poverty and mitigating climate change,” added the PS. As part of the process, the government has embarked on the implementation of the Medium-Term Revenue Strategy (MTRS) that will further strengthen tax revenue mobilization efforts to over 20 percent of GDP over the Medium Term.

In addition, tax administration by KRA will be strengthened through scaling up use of technology to seal leakages. In part, this will involve enhancements of iTax and Integrated Customs Management System (iCMS) and usage of Tax Invoice Management System (e-TIMS).

In the 2024/2025 budget, revenue collection including Appropriation-in-Aid is projected at Sh3.435 trillion (19.1 per cent of GDP). Of this, ordinary revenue is projected at Sh2.948 trillion (16.4 per cent of GDP).

Further total expenditure is projected at Sh4.188 trillion (23.2 percent of GDP), comprising recurrent expenditure of Sh2.859 trillion (15.9 percent of GDP), development expenditure of Sh877.8 billion (4.9 percent of GDP).

County governments are expected to benefit with Sh446 billion which includes Sh391.1 billion for equitable share and Sh54.9 billion in additional allocations and Sh5 billion for Contingency Fund.

The resulting fiscal deficit including grants of Sh703.9 billion (3.9 percent of GDP) in 2024/2025 will be financed by a net external financing of Sh326.1 billion (1.8 percent of GDP) and a net domestic financing of Sh377.7 billion accounting 2.1 percent of GDP.

The growth for 2024 is projected to remain strong at 5.5 percent compared to the 4.8 percent growth in 2022.

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