BY NAMULONGO PETER,NAIROBI,17TH JAN 2021-Kenya Revenue Authority is confident of closing in on its revenue targets for the financial year ending June 30, after a good performance last month.
The taxman closed the calendar year 2020 on a high after managing to surpass its December collections target, setting the stage for an improved performance this year.
Notwithstanding the challenging economic environment that persisted to the tail end of the year, KRA posted improved revenue performance rate of 101.3 per cent for December 2020.
Commissioner General Githii Mburu said this was the first positive and above target collection rate since the outbreak of Covid-19 pandemic.
The improved performance is attributed to the economic recovery following the relaxation of the stringent Covid-19 containment measures and enhanced compliance efforts by KRA in the period.
The taxman collected Sh166 billion against a target of Sh164 billion, representing 3.5 per cent growth over the same period last year.
For the month under review, the Customs and Border Control Department registered the highest ever monthly revenue collection in KRA’s history by collecting Sh60.777 billion, reflecting a growth of 40.9 per cent and registering a revenue surplus of Sh12.191 billion.
This resulted in a cumulative surplus for customs revenue of Sh3.788 billion at the end of December 2020 compared to a deficit of Sh8.402 billion as at the end of November 2020.
Average daily revenue progressively increased to Sh1.744 million in December 2020, the highest ever daily average collection for customs revenue.
Exemptions and remissions in customs declined by 39.3 per cent, positively impacting the revenue base by Sh3.344 billion which is consistent with efforts by government to address the growth of remissions and exemptions which have undermined revenue mobilisation over the years.
“The Domestic Taxes Department also registered the highest collection rate of 91.1 per cent since the start of the covid-19 pandemic,” Mburu noted.
During the month under review, Pay As You Earn (PAYE) taxes recorded the best performance at 99.8 per cent while Withholding Tax surpassed the target by Sh725 million reflecting positive economic recovery prospects, he said.
Corporation Taxes recorded a performance rate of 93.5 per cent.
The performance was negatively affected by a decline in instalment remittance from banks by 25.3 per cent (from Sh13.140 billion in December 2019 down to Sh 9.810 billion in December 2020).
Mburu said the Value Added Tax (VAT) domestic remittances declined by 19.9 per cent as purchases accelerated at a faster rate (8.9 per cent growth) than sales (1.4 per cent growth), thereby diminishing the VAT forecast for the month.