Kenya falls short on first quarter revenue - CNBC Africa

Kenya falls short on first quarter revenue

East Africa

by Elayne Wangalwa 0

Kenya’s Revenue Authority (KRA) has missed its tax revenue collection in the first quarter of its fiscal year.

The authority collection has fallen short by 17 billion Kenya shillings collecting 241.2 billion Kenya shillings in the first quarter of the 2014/15 financial year representing a 6 per cent drop.

The tax collector’s dismal performance is as a result of a meager show from the custom import duty and Value Added Tax.

Moreover, the authority recorded a 42 per cent increase in non-dutiable imports as a result of the country’s national carrier Kenya Airways’ fleet expansion programme. The carrier has received five of the first set of six units of the 787 Dreamliner fleet into the network.

KRA faces a daunting task of raising 1.18 trillion Kenya shillings to finance the government budgetary plan of 1.8 trillion Kenyan shillings. In June, the country’s treasury read out the budgetary address which had a 13 per cent increase compared with the previous fiscal year in order to unlock the country’s growth and economic development in June. The remaining amount will be funded through grants, loans and domestic borrowing.

In the 2013/2014 fiscal year, KRA marginally exceeded its tax collection target by 100 million Kenyan shillings. The taxman collected 963.8 billion Kenyan shillings in the period ending June 2014 and expects to collect a further 1.12 billion.

Meanwhile, Kenya’s neighbouring peer, Uganda also reported that it had missed its first quarter revenue collection target by 470 million Ugandan shillings. The deficit is the lowest ever registered in recent years. Nonetheless, the authority collected a net revenue of 2.8 trillion Ugandan shillings, registering a performance rate of 99.98 per cent representing a growth of 15 per cent compared to the same period last year.