NAIROBI, Kenya, Feb 18 – The government missed its revenue collection target by Sh62.8 billion in the first half (H1) of the 2024/2025 fiscal year, the latest data shows, highlighting challenges that the state is facing in its ambition to grow earnings.
The Treasury Quarterly Economic and Budgetary Review for the period ending December 31, 2024, shows that the revenue collected by the state stood at Sh1.37 trillion against an initial target of Sh1.43 trillion.
Key tax bases for the state took a beating with the import duty income target falling by Sh6.8 billion to Sh71.5 billion, excise duty by Sh13.7 billion to Sh141.3 billion and PAYE by Sh21.3 billion to Sh276 billion, among others.
Others that performed dismally are local VAT, which was Sh15.7 billion lower than the previous goal of Sh149.9 billion, and imports VAT by Sh20.8 billion to Sh154.2 billion.
“This performance is attributed to shortfall recorded in ordinary revenue of KSh 93.2 billion while collection of the ministerial A-I-A was above target by KSh 30.4 billion.,” Treasury said in the report.
“Therefore, ordinary revenue collection was KSh 1,157.8 billion against a target of KSh 1,251.0 billion. All ordinary revenue categories recorded below target performance during the period under review except investment revenue which surpassed its target by KSh 6.2 billion.”
Missed targets saw the government’s total expenditure and net lending for the period breach the sealing target to Sh1.89 trillion against a target of Sh1.79 trillion.
“Recurrent expenditure for National Government amounted to KSh 1,400.8 billion (excluding KSh.30.4 billion for Parliament and Judiciary), against a target of KSh 1,299.4 billion implying that expenditures were above the set target by KSh 101.4 billion,” Treasury added.
“The above target expenditure in recurrent category was mainly due to higher than targeted expenditures on pension payments, domestic interest payment, and Operation and Maintenance.”
