KRA pockets bulge by 12%

January 7, 2009

, NAIROBI, Kenya, Jan 7 – The Kenya Revenue Authority (KRA) has announced a 12.8 percent growth in revenue for the first half of the fiscal year, compared to the same period last year.

KRA Commissioner General Michael Waweru has said that this is despite the cumulative underperformance of the Kenyan economy and a threatening global economic recession whose effect was anticipated would trickle down to the country.

Mr Waweru said on Wednesday that the stronger performance recorded in the second quarter and the economic fundamentals behind it – including lower oil prices and a weaker currency, are likely to prevail.

“In the second quarter, KRA collected Sh121.8 billion against a target of Sh120.4 billion. A surplus of Sh1.4 billion was realised, driven primarily by a strong performance in December 2008,” held the KRA chief.

Mr Waweru expressed optimism that the revenue body would achieve its ambitious targets of collecting Sh492.9 billion, which will represent a 13.6 percent increase over the Sh433.9 billion targeted in the last fiscal year.

“I think for us as a Revenue Authority, the worst is behind us, and we should see better performance in the next two quarters provided the economic fundamentals sustain,” he said.

Mr Waweru also revealed that the recently introduced turnover tax was not performing too well, as only 6,000 companies against a target of 15,000 had registered for the same.

However, he was quick to reassure that KRA intends to do more to ensure the turnover tax targets are met within this year.

Meanwhile, the Commissioner General is proposing that in future tax compliance becomes a requirement for elective office holders in the country.

“So that if you seek elective office you have to get clearance from the tax authority, so that you have the moral authority to administer this tax when you get into office,” he explained.

“And I mean all taxes; including even on benefits like motor vehicle financing and all other taxes that are payable by you and me. Everyone in this country should pay because they also enjoy the services offered by the government,” said Mr Waweru.

He admitted that the refusal by MPs to pay tax has negatively affected revenue collection from the Pay As You Earn (PAYE) tax, which had been included in the Authority’s targets for this fiscal year.

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