Kenya’s economy expanded by 4.6 per cent in 2025, slightly lower than the 4.7 per cent growth recorded in 2024, providing a stable foundation for tax revenue growth during the 2025/26 financial year, according to the Kenya Revenue Authority (KRA).

In a report for the financial year 2025/2026 released by the Kenya Revenue Authority on Friday, July 10, 2026, the authority said the economy maintained positive momentum despite the marginal slowdown, enabling stronger revenue mobilisation in a more moderate growth environment.

“Kenya’s economy continued to grow in 2025, although at a slightly slower pace than the previous year. This provided a positive base for revenue performance, while also reflecting a more moderate growth environment,” KRA said in its revenue performance report.

Tax collection hits record

Against this backdrop, KRA recorded a historic Ksh2.84 trillion in total revenue collection during the 2025/26 financial year, the highest ever collected by the tax authority. The performance reflected continued improvements in tax administration and compliance despite the softer pace of economic growth.

Domestic revenue growth

Domestic revenue remained the largest contributor to the overall collections, with KRA raising Ksh1.851 trillion, a 9.7 per cent increase from the previous financial year. The authority achieved 93 per cent of its Ksh1.991 trillion domestic revenue target.

KRA attributed the growth in collections to sustained economic activity across key sectors, strengthened tax compliance measures, and reforms aimed at enhancing efficiency in revenue administration.

The authority noted that although economic growth eased marginally in 2025, it remained resilient enough to support increased tax collections, underscoring the economy’s ability to withstand prevailing domestic and global economic headwinds.

The record revenue collection comes as the government continues implementing fiscal consolidation measures aimed at expanding the tax base, improving revenue administration, and reducing dependence on borrowing to finance public expenditure.

KRA expressed confidence that continued economic resilience, coupled with ongoing reforms to modernise tax administration and enhance voluntary compliance, will support even stronger revenue performance in the coming years.