KRA to hit target

October 21, 2008

, NAIROBI, October 21 – The Kenya Revenue Authority (KRA) has expressed confidence that it will surpass its revenue target for the year despite experiencing a Sh10 billion deficit in the first quarter.

KRA Commissioner General Michael Waweru said on Tuesday that they were on course to exceeding their Sh493 billion target by Sh7 billion. He also downplayed the Sh10 billion shortfall terming it as nothing unusual.

“This phenomena is not unusual; if you remember in the 2005 -2006 fiscal year, the same happened but in the final quarter we managed to exceed our target by Sh4 billion,” he said, explaining that the current shortfall was mostly due to revenue decline in the Customs Department, but which is already reporting good returns.

“We had  a temporary set back in the first quarter largely because of the problems at the installation of Kilindini Waterfront Automated Terminal Operating System (KWATOS) at the Mombasa port which led to a Sh6 billion shortfall in July and another Sh2 billion in the next two months.” Mr Waweru said.

The KRA boss however observed that revenue collection for the current quarter had began so well and expressed confidence that it could only get better.

“This quarter has started very well, as of Friday and with nine working days to go, the Customs (department) had collected Sh10 billion, which means they could do Sh18 billion  this month, and if they do that they could recoup the shortfall.”

He stated that the other departments were also reporting good returns, emphasising that as long as the customs department recovered its shortfall the deficit would be met.

“With increased importation for Christmas we expect this revenue to go up and with more people getting a chance to clear their goods at the port it should get even better,” the tax man said. “This deficit was recorded over one quarter so I believe we can recover the same within this next quarter.”

Meanwhile on the thorny VAT refunds issue, Mr Waweru explained that the President’s directive that this is done within 60 days would only be successful if Treasury provided funds for the same.

He said KRA had formed a committee to review the process and see how it could be shortened.

Mr Waweru however observed that unlike in the past three years, Treasury did not provide funds for the exercise in the budget and therefore KRA will have to request for the funding to carry out the excercise.

“Currently we are restricted to Sh1 billion translating to Sh180 million per month, which is quite little,” he said.

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