NAIROBI, Kenya, Jul 20 – The Kenya Revenue Authority (KRA) missed its revenue target for the 2011/2012 financial year (FY) by Sh10 billion to report a collection of Sh707.4 billion.
This year’s revenue target of Sh717 billion was reviewed downward from the initial Sh733.4 billion, after the KRA consulted the Treasury on cutting revenue estimates citing macroeconomic factors that impacted revenue collection.
KRA Commissioner General John Njiraini says the revenue growth was the poorest in petroleum taxes that declined by 4.1 percent and Indirect Domestic taxes (VAT and Domestic Excise Duty) by 3.7 percent.
“This trend has been consistent. It is something we have been dealing with for the whole year. In the case of petroleum taxes the decline was attributable to the removal of excise duty on kerosene and diesel,” he explained.
The drop in Indirect taxes was due to the discontinuation of withholding VAT that saw Domestic VAT decline by 10.9 percent, as well as the impact of shifting consumption patterns on excise taxes on beer.
In addition, the road transport target, which Njiraini says was adjusted upwards by an unrealistic figure, also impacted negatively on cumulative collection for 2012.
Overall growth in revenue compared to 2010/11 figures (Sh634.9 billion) was 11.4 percent, representing a 98.7 percent performance rate for FY 2011/12.
The fourth quarter (April to June 2012) registered a 9.6 percent growth (Sh18.2 billion) from the same period last year to Sh208.8 billion.
The KRA will be looking to establish existing tax gaps by implementing an Integrated Tax Management System by October this year.