Kenya Revenue Authority (KRA) faces a daunting task to raise an extra Sh586 billion to meet collection targets for the current 2023/24 financial year (FY) and beat its previous figures.

As of March 2023, KRA had raised Sh1.554 trillion (or 72.6 per cent) against a target of Sh2.14 trillion for the current FY that was set by Treasury last July, a target which has even been revised upwards since the new administration took over. KRA collected Sh2.031 trillion in the last 2021/22 FY.

Although KRA maintains its collection has been growing year-on-year, it must mobilise about Sh195.33 billion monthly between April and June 2023, highlighting aggressive revenue collection measures expected from the authority.

Bridging the deficit

“Conscious of the mandate to mobilise and secure revenue for national development, KRA remains committed to bridging the deficit on target,” KRA said in a statement on Monday while insisting that its collection levels averaged 95.1 per cent on the original target.

The government is currently battling its worst-ever cash crunch forcing Treasury to whip State agencies to revive some legal but dormant levies under their mandate in the latest tightening of tax policies to bridge budget deficits.

Kenya Bureau of Standards (KEBS), Water Resource Management Authority (WRMA), and Ministry of Tourism are some of the state agencies and departments that have mulled restructuring policies.

The move could help the State agencies raise their own money to fund their operations, easing pressure on the major tax heads that predominantly fund the national budget. Miscellaneous levies are generally meant for specific purposes, with some being collected by the Kenya Revenue Authority (KRA) on behalf of the agencies.

A reminder

KEBS has for instance launched an aggressive reminder to every business considered a ‘manufacturer’ to remit a decade-long Standards Levy (Amendment) Order 1999, charged at 0.2 per cent of the monthly turnover excluding value-added tax (VAT) and discounts.

According to KEBS Managing Director Bernard Njiraini, the agency has collected Sh5 billion from the Standards Levy over the past three years.

“This levy is something that has been there since 1999. We are just enhancing and communicating a policy that has been there. It is a routine work and reminder to people to pay and we do it on yearly basis,” Njiraini told the Business Hub when asked about the timing of the implementation.   WRMA has also proposed to hike the water levy on sold power by 40 times to Sh2 per unit while there are also talks to have the two per cent tourism levy.