How KRA plans to net Sh6.8 trillion in revenue by 2024

 How KRA plans to net Sh6.8 trillion in revenue by 2024

KRA Commisioner General Githii Mburu

Kenya Revenue Authority (KRA) has projected a collection of at least Sh6.8 trillion in the next three financial years. Over the period 2021/22 to 2023/2024 financial years.

The revenue agency announced the target when it unveiled its 8th Corporate Plan whose theme is ‘Revenue mobilisation through tax simplification, technology-driven compliance and tax base expansion early today.

It is expected that the exchequer revenue will rise from Sh1.76 trillion in 2021/22 to Sh 2.5 trillion in 2023/24. Through the target revenue collection, the KRA is expected to sustain an annual average growth of 16.9 per cent over the period in which nominal GDP growth is
also projected to grow at 11.2 per cent.

EXPANDED TAX BASE

To increase revenue collection and achieve the set target, KRA will expand the tax base by tapping into new taxable income sources. The key focus as highlighted in the Corporate Plan will be on sectors with potential for revenue growth, such as real estate, businesses in the Turnover Tax (ToT) regime, registered companies, agriculture sector, employment sector, High Net-Worth Individuals (HNWI) and the digital economy.

The Authority aims at increasing the number of active taxpayers by an additional two million. Through its Customs and Border Control Department (C&BC), KRA will also focus on enabling trade across borders through the facilitation of legitimate trade by effectively monitoring both land and sea borders and strengthening the Authority’s Marine Unit. It will also improve pre-arrival cargo clearance using its Integrated Customs Management System (iCMS).

Speaking during the launch KRA Commissioner General Githii Mburu said that the agency is up to the task amidst various challenges that range from an upcoming general election in 2022, post-Covid-19 recovery measures and a growing informal sector that is hard to tax.

He said that the achievement of the plan deliverables will be supported by the six thrusts: revenue mobilization, tax base expansion, simplification of the tax regime, application of cutting-edge technology, performance-oriented and ethical organization culture and strategic partnerships to bolster compliance.

SIMPLIFIED TAX REGIME

Treasury CS Ukur Yatani lauded KRA for its achievements in the past corporate plan. Key achievements include the growth of the active taxpayer base by 55 per cent, from 3.94 million
in 2018/19 to Sh6.1 million.

Revenue collected during the plan period was Sh4.849 trillion, a 21 per cent growth compared to the 6th Corporate Plan period in which total Sh 4.000.8 trillion was collected.

KRA registered an improved performance despite the outbreak of the COVID-19 pandemic that cropped up in early 2020 leading to the emergence of new business models, increased use of the digital platforms for transactions and growth in the hard-to-tax sectors, such as the informal sector.

Other strategies that KRA aims to implement during the 8th Corporate Plan period include; simplification of the tax regime to ease compliance and service delivery, application of cutting-edge technology in revenue mobilization, strategic partnerships to bolster compliance, facilitating and motivating staff for enhanced productivity by emphasising on ethical conduct and professionalism by all staff.

The agency is setting ambitious revenue collection target despite missing it’s annual revenue collection targets for the past three consecutive year.

This year, it has already collected Sh1.33 trillion for 11 months to May and has to collect at least Sh140 billion by end of this month to its 2020/21 target of Sh1.47 trillion. It has a huge task to collect at Sh1.8 trillion for the financial year starting July 1 to help the exchequer fund the Sh3.6 trillion.

END

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