The Kenya Revenue Authority (KRA) has announced a significant milestone in its revenue collection efforts, having collected Kshs 2.112 trillion by 30 April 2025. This achievement places KRA at 96.5 percent of its set target of Kshs 2.189 trillion for the period.
The revenue marks a 6.1 percent increase from the Kshs 1.990 trillion collected during the same period in the previous financial year (2023/2024), reflecting a positive growth trend despite challenging economic conditions.
Key Revenue Highlights
- Domestic Taxes: Between July 2024 and April 2025, KRA collected Kshs 1.386 trillion in domestic taxes, a 4.7 percent increase compared to Kshs 1.323 trillion in the previous year.
- Customs Revenue: Customs revenue rose by 9.1 percent to Kshs 722.743 billion, up from Kshs 662.447 billion in 2023/2024.
- Agency Revenue: KRA collected Kshs 205.518 billion on behalf of other government agencies, surpassing its target by 11.8 percent. This represents a robust growth of 37.1 percent compared to Kshs 149.876 billion in the prior year.
- Exchequer Revenue: Revenue collected on behalf of the National Treasury stood at Kshs 1.906 trillion, a 3.6 percent rise from the previous year’s Kshs 1.840 trillion.
Economic Challenges and Impact
Despite the growth, KRA noted that several economic indicators adversely affected revenue mobilisation. Kenya’s GDP growth slowed to 4.0 percent in Q3 2024, down from 6.0 percent in Q3 2023. The Purchasing Managers Index (PMI) averaged 49.8 between July 2024 and April 2025, signalling weak private sector activity.
There was also a 1.6 percent decline in import values, reflecting reduced demand. Although the Central Bank lowered its base lending rate to 10.75 percent, commercial lending rates remained high at 17.22 percent, curbing private sector borrowing.
The value of imports fell, particularly oil imports, which declined by 10.2 percent. Export earnings also dropped by 3.6 percent due to lower performance in tea (–18.6 percent) and horticulture (–6.2 percent).
Policy Changes and Compliance Measures
Recent policy changes allowed taxpayers to offset Kshs 53.8 billion in current tax liabilities using adjustment vouchers from previous periods. Additionally, the reclassification of SHIF and Housing Levy as allowable deductions has slightly reduced the PAYE tax base.
However, KRA has continued to improve compliance through several initiatives:
- Centralised Release Office: Improved cargo clearance, boosting customs revenue growth to 14.4 percent in April 2025.
- eRITS System: A new digital platform for landlords to file and pay rental income tax efficiently.
- Tax Amnesty Programme: Generated Kshs 13.5 billion and waived Kshs 164.9 billion in penalties and interest, benefitting over three million taxpayers.
- eTIMS System: Enhanced VAT fraud detection through digital invoicing and reporting.
- Dispute Resolution: Helped recover Kshs 21.9 billion in revenue from resolved tax disputes between January and March 2025.
KRA has set an ambitious target of Kshs 2.668 trillion by the end of the 2024/2025 Financial Year. The Authority remains confident in its strategies and reforms, stating that it is on track to support the government in sustaining economic stability.