KRA Misses PAYE Revenue Target by Biggest Margin Since COVID-19 Period as Firms Struggle

 

The Kenya Revenue Authority (KRA) has failed to meet its payroll taxes target in the first quarter of the 2023/2024 financial year. KRA commissioner-general Humphrey Wattanga speaks at a past event. Photo: Humphrey Wattanga. Source: Twitter During the period under review (July to September), the taxman collected KSh 123.04 billion against a target of KSh 142.93 billion as pay-as-you-earn (PAYE).  The shortfall of KSh 19.88 billion (13.91%) was the biggest margin registered since the COVID-19 pandemic period when the government offered tax reliefs.In the first Quarterly Economic and Budgetary Review Report published by the National Treasury, the exchequer blamed delayed disbursements for the missed target. "The revenue was below the set target by KSh 31.6 billion on account of underperformance of ordinary revenue," Treasury stated. How much did govt collect in 4 months? Despite the fall in PAYE revenue, President William Ruto's administration increased revenue collection through the new tax measures proposed in the Finance Act 2023. The government collected over KSh 684 billion in four months after the implementation of the Finance Act 2023. The National Treasury reported an increase in tax revenue by 12.63% during the period. Ruto's government introduced a housing levy, double Value Added Tax (VAT) on fuel, export and investment promotion levy, and digital assets tax, among others, to raise revenue for the KSh 3.93 trillion budget for 2023/24. Why fuel consumption dropped to a 5-year low Data showed that petrol consumption declined to 1.01 billion litres between January and June from 1.074 billion in 2022, representing a drop of 5%. At the same, diesel consumption fell by 4% from 1.36 billion litres to 1.01 billion litres, the lowest level in five years except in 2020 during the COVID-19 pandemic. Energy Cabinet Secretary (CS) Davis Chirchir predicted tough times following doubling Value Added Tax (VAT) on petroleum from 8% to 16%. "We are dealing with several governments and the suppliers of these products. We are likely to be going to even harder times," Chirchir warned

BY JAPHET RUTO