Kenya Revenue Authority (KRA) has hit the two trillion mark after collecting Ksh 2.112 trillion as of 30th April, 2025. The collection reflects a performance rate of 96.5% against the target of Ksh 2.189 trillion.
During the period, revenue collection registered a growth of 6.1%, reflecting an upward trajectory in collection compared to Kshs 1.990 Trillion realized in the same period during the previous financial year (2023/2024).
In the period under review, Domestic taxes amounted to Kshs 1.386 trillion between July – April 2024/25, translating to a revenue growth of 4.7% over Kshs 1.323 trillion realized in July-April 2023/24.
Customs revenue collection also grew by 9.1% after registering a cumulative collection of Ksh 722.743 Billion, compared to Kshs 662.447 Billion that was collected in the same period of FY 2023/24.
Agency revenue (collected on behalf of other Government entities) collection amounted to Ksh 205.518 billion, registering a performance rate of 111.8% against a target of Ksh 183.789 billion. This represents a growth of 37.1% compared to the collection of Kshs 149.876 Billion realized in the same period of the previous financial year (2023/2024).
Exchequer revenue (collected on behalf of the National Treasury) amounted to Ksh 1.906 trillion, reflecting a performance rate of 95.0% against a target of Kshs 2.006 trillion. This represents a growth of 3.6% compared to the collection of Ksh 1.840 trillion that was collected in the same period in the previous financial year (2023/2024).
Despite the progressive growth, the collection was affected by various economic indicators that directly drive revenue collection. The various indicators that influence revenue performance have generally moved contrary to expectations, affecting revenue mobilization.
GDP grew at a slower pace of 4.0% in Q3 2024, compared to 6.0% in Q3 2023. Similarly, the Purchasing Managers Index (PMI) averaged at 49.8 between July 2024 and April 2025, indicating a slowdown in private sector activities. This subdued demand was further evidenced by a 1.6% drop in import values, an important indicator of domestic demand for both raw materials and consumer goods.
Additionally, despite the Central Bank of Kenya lowering its base lending rate to 10.75%, commercial bank lending rates remained high, averaging 17.22%, as several banks had yet to adjust their rates. This disparity negatively impacted private sector borrowing and investment. However, there are strong indications that most banks are working towards ensuring compliance.
Despite a stronger shilling, the value of imports declined, particularly oil, which dropped by 10.2%. Export earnings also shrank by 3.6%, driven by declines in key sectors such as tea (–18.6%) and horticulture (–6.2%).
The adverse effects from most of these indicators are beginning to dissipate as most of them start to experience a turnaround in the recent past.
A recent policy change has allowed taxpayers to offset their current tax liabilities using adjustment vouchers, such as refund and overpayment adjustment vouchers. Several taxpayers utilized Kshs 53.8 billion in Adjustment Vouchers accrued from previous periods to offset current tax liabilities, reducing effective collections. Moreover, the reclassification of SHIF and the Housing Levy from tax reliefs to allowable deductions before tax computation has lowered the Pay-As-You-Earn (PAYE) tax base.
Despite revenue mobilization being impeded by impacts from the above factors, KRA enhanced its compliance through various initiatives.
For example, the implementation of a Centralized Release Office has significantly improved the efficiency of cargo clearance processes. This reform has positively impacted Customs revenue performance, with revenue growth increasing from an average of 7.0% as of the end of January 2025 to 22.6% in March and 14.4% in April 2025. Additionally, the initiative has contributed to enhanced import values, resulting in an increase in average daily non-oil revenue from Ksh 2.087 billion during the period July to February 2024/25, to Ksh 2.309 billion in March and April 2025.
To further improve tax compliance and convenience for landlords, the Electronic Rental Income Tax System (eRITS) was recently rolled out. This digital platform enables landlords and property owners to seamlessly compute, file, and pay Monthly Rental Income (MRI) tax. It also includes property management tools such as property registration and tenancy management, providing a comprehensive, user- friendly experience on a single platform.
The Tax Amnesty Programme has also seen strong uptake, generating Ksh 13.5 billion in revenue between December 2024 and April 2025. This initiative aims to encourage voluntary compliance by offering relief on penalties and interest for taxpayers who settle their principal tax liabilities. KRA has so far waived Ksh 164.9 billion in penalties and interest, benefitting over three million taxpayers.
The introduction of the Electronic Tax Invoice Management System (eTIMS) has enhanced the ability to detect and prosecute VAT fraud schemes. By digitizing invoicing and tax reporting, eTIMS promotes greater accountability and has led to improved levels of tax compliance across the board.
The enhanced Dispute Resolution Framework has expedited the resolution of tax- related disputes, allowing for quicker recovery of revenue previously tied up in legal processes. As a result, Ksh 21.9 billion was released for collection during the period from January to March 2025.
KRA targets to collect 2.668 trillion by the end of Financial Year 2024/2025. The Authority is confident that it will continue with the upward trajectory and achieve the set target to enable the government sustain the country’s economy.
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