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Home » Economy » KRA Surpasses Revenue Target, Collects Kshs. 2.571 Trillion Amid Economic Hurdles

KRA Surpasses Revenue Target, Collects Kshs. 2.571 Trillion Amid Economic Hurdles

Queen Amber by Queen Amber
1 year ago
in Economy
Reading Time: 4 mins read
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KRA Offices

KRA Offices

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The Kenya Revenue Authority (KRA) has announced a 6.8 percent growth in revenue collection for the 2024/2025 Financial Year, reaching Kshs. 2.571 trillion and surpassing its target of Kshs. 2.555 trillion. The performance, which translates to a collection rate of 100.6 percent, reflects resilient tax administration despite a challenging economic environment.

The authority attributes the improved performance to strategic reforms, adoption of technology, and intensified compliance enforcement, especially during the second half of the financial year, which saw revenue growth accelerate to 9.1 percent—double the 4.5 percent growth recorded in the first half.

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Stronger Economic Indicators Amid Global Challenges

KRA’s performance was underpinned by macroeconomic factors such as a GDP growth of 4.7 percent and an easing inflation rate, which averaged 3.6 percent over the year. The Kenyan shilling also strengthened to an average exchange rate of Kshs. 129.35 against the US dollar, down from Kshs. 144.1 the previous year. International oil prices fell by 12.5 percent, resulting in significant local fuel price reductions.

However, the economic landscape remained turbulent due to high bank lending rates, a global trade slowdown, and geopolitical conflicts. The shelving of the Finance Bill 2024, weak import growth (0.04 percent), and a 2.0 percent decline in exports—particularly from tea and horticulture—also dampened revenue prospects.

Despite these headwinds, KRA implemented robust administrative measures that stabilised revenue collection.

Revenue Composition and Sector Performance

  • Exchequer Revenue: Collected Kshs. 2.323 trillion against a target of Kshs. 2.347 trillion, achieving a 99 percent performance rate.
  • Agency Revenue: Generated Kshs. 248.276 billion on behalf of other government agencies, exceeding target by Kshs. 40.465 billion—a 119.5 percent performance rate.
  • Domestic Taxes: Recorded a 4.8 percent growth to Kshs. 1.688 trillion, slightly below the target of Kshs. 1.721 trillion.
  • Customs Revenue: Surged by 11.1 percent to Kshs. 879.329 billion, outperforming the Kshs. 830.368 billion target with a 105.9 percent success rate.

Key tax heads recorded mixed results. Domestic VAT rose by 4.2 percent, aided by a second-half compliance push. Excise taxes on betting and betting tax surpassed targets, while PAYE grew modestly at 3.3 percent. Corporation tax expanded by 9.9 percent, supported by growth in ICT, manufacturing, and financial services. Domestic excise, however, underperformed due to reduced remittances from alcohol and tobacco manufacturers.

Reform and Modernisation Driving Compliance

KRA’s transformation agenda continues under its 9th Corporate Plan, which prioritises technology adoption, simplification of tax processes, and enhanced customer support. Key initiatives include:

  • Electronic Tax Invoice Management System (eTIMS): Minimized VAT fraud and improved filing efficiency.
  • Artificial Intelligence: Deployed in customs to detect smuggling and seal loopholes.
  • eRITS (Electronic Rental Income Tax System): Improved tax visibility in the real estate sector.
  • API Integration Platform (GavaConnect): Enabled seamless third-party linkages and simplified service delivery.

Additionally, tax base expansion programmes brought in Kshs. 24.9 billion, while taxation of the digital economy netted Kshs. 14.3 billion, representing a 32 percent growth. Debt collection efforts recovered Kshs. 141.26 billion, while the tax amnesty programme yielded Kshs. 29 billion from over 116,000 voluntary declarations.

Trade Facilitation and Anti-Corruption Efforts

KRA also made gains in customs and trade facilitation, reducing average cargo clearance times from 110 hours to 43 hours through streamlined port procedures and partnerships with 23 agencies. The iWhistle anti-corruption initiative recovered Kshs. 6.8 billion from 821 anonymous reports and prompted internal investigations of 45 staff members.

A Milestone Year

As KRA marks its 30th anniversary this July, it celebrates a three-decade transformation that has seen revenue collection rise from Kshs. 122 billion in 1995 to over Kshs. 2.5 trillion in 2025. On-time tax filing reached 79 percent as of June 30th, reflecting improving compliance culture among taxpayers.

Commissioner General of KRA expressed gratitude to Kenyan taxpayers for their commitment, stating:

“We appreciate all Kenyans for remaining committed to honouring their tax obligations, which plays a key role in Kenya’s economic sustainability and development. KRA remains steadfast in simplifying tax processes and delivering a positive taxpayer experience.”

As KRA looks to the future, its focus remains on data-driven administration, digital integration, and fostering voluntary compliance to sustain growth and support national development.

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