The Kenya Revenue Authority (KRA) has announced a new tax collection record of Ksh.1.58 trillion for the period closing June 30, 2019.
Despite the fact that there is a notable gain in revenue yields this year, the collection which is Ksh.0.14 trillion more than the preceding period sits just 11 per cent off the budgeted Ksh.1.77 trillion revenue budget.
The open conflict between the Kenya Revenue Authority and betting firms over the adoption and implementation of withholding tax on customer winnings put the heaviest dent on targets, contributing to the largest share of shortcomings to the presented tax policies in the financial year.
“Tax policies raised Ksh.48.2 billion compared to a forecast of 62.9 billion. Thus revenue shortfalls from tax policy accounted for Ksh.14.7 billion or 23 per cent of the overall revenue shortfall. Non-compliance with withholding tax on winning betting provisions is the principle course of this shortfall,” read part of KRA’s annual revenue performance report for the 2018/19 fiscal year”
At the same time, a significant reduction in company investments which soared by nearly three-fold in the negative saw the undermined growth for the lump-some tax head as hiccups in the recovery of corporations from the tapered growth of 2017 remained evident.
KRA reaped big gains from the enactment of the controversial value-added tax (VAT) on petroleum products to the tune of eight per cent to see the tax man’s oil-linked revenues surge by 16.3 per cent as the new tax propped up the charge by Ksh.17.2 billion.
That figure, however, lay beneath the targeted Ksh.35 billion levy for petroleum as the additional VAT taxes effectively led to a dip in the use of the commodity by consumers.
The up-scaling of salaries in the public sector saw the pay as you earn (PAYE) income tax priced segment strengthen by 4.5 per cent during the year, countering drawback effects from the widening of employee tax bands which saw the revenue base shrink by Ksh.6.1 billion.
Meanwhile, domestic excise taxes surged by 12.3 per cent even in the face of a slow down in both the output of beer and cigarettes, items which contribute largely to the local excise charge.
KRA is expected to raise a total of Ksh.1.9 trillion in ordinary revenues from the current financial year as the National Treasury seeks to tap more gains from within as the scope for credit financing remains on the contraction.
The taxman hopes to scale up his efficiency in closing in on Treasury targets.
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