Tax collection slows down in July

Tax collections in the first month of the current financial year ending June, 2019, grew at a slower pace compared with same period last year, Treasury statistics showed on Friday, signalling reduced economic activity.

The Kenya Revenue Authority (KRA) netted Sh107.87 billion in July, a growth of 8.99 percent over the Sh98.97 billion collected in the same period a year earlier.

The growth was slower compared with 12.74 percent increase recorded in July 2018.

Tax collections are usually lower at the start of the financial year in July, mainly on little or no development expenditure by the Government and delays in kick-off of new taxes pending lawmakers’ approvals.

The State Department of Energy was the only one that spent on development in July.

Counties have also not been allocated cash following a stalemate over the Bill that guides sharing of revenues between the devolved units and national government.

The taxman has in recent years struggled to meet revenue targets.

In the year to June2019, the target was moved twice from initial Sh1.69 trillion to Sh1.61 trillion in December and eventually to Sh1.51 trillion in June, but was still missed by Sh72.66 billion in the end.

“Targets are a matter of balancing ambition and the reality of what’s happening in terms of economy,” KRA’s deputy commissioner for strategy, innovation and risk management Joseline Ogai said.

“We have not succeeded for the last few years, but our objective is always to meet the target as printed. But what underpins those targets is ambition.”