In a strategic move, the Kenya Revenue Authority (KRA) aims to collect an additional Ksh 282 billion in revenue from large taxpayers in the current fiscal year, supported by simplified processes to enhance compliance.
KRA Commissioner-General, Humphrey Wattanga, announced the tax agency’s ambitious goal to collect Ksh 1.1 trillion from this group of taxpayers in the 2023/2024 financial year, marking a significant increase from the Ksh 818 billion collected the previous year.
During a recent press conference, Mr. Wattanga emphasized KRA’s commitment to facilitating compliance while contributing to the nation’s economic goals. He highlighted the establishment of the Large Taxpayers Office (LTO), a dedicated office to engage and partner with large taxpayers through a relationship management framework.
Large taxpayers, defined as those with an annual income exceeding Ksh 1.3 billion, currently number 2,089.
To achieve this substantial target, the KRA has implemented a personalized tax compliance system, focusing on a more tailored approach to maximize revenue collection.
This endeavor comes as the KRA faces increasing pressure to boost revenue, especially in light of the slow performance in key sectors such as manufacturing. Notably, tax collections for the first quarter of the current fiscal year saw a modest growth rate, excluding the pandemic year, despite new taxation measures introduced by the William Ruto administration.
According to Treasury data, KRA collected Ksh 514.26 billion in revenue in the three months ending in September, reflecting a 10.55 percent increase from the Ksh 465.20 billion collected in the same period the previous year, when taxes had grown by 11.60 percent.
This growth rate is the slowest seen in five years, excluding the pandemic year (2020/21) when the Treasury granted tax reliefs.
In comparison, the first quarter of the 2021/22 fiscal year saw an impressive 31.21 percent increase to Ksh 416.82 billion, primarily attributed to a low base effect from the previous year when collections had dipped by 14.68 percent due to Covid-19-related tax reliefs.
KRA’s proactive commitment to enhancing revenue collection from large taxpayers, combined with its personalized compliance systems, underscores its dedication to supporting economic growth in Kenya
Photo: KRA. Source: UGC
By: Montel Kamau
Serrari Financial Analyst
24th October, 2023
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