KRA Misses Revenue Target By Sh84 Billion Despite Crossing Sh2 Trillion Mark
News Updated: 07 April 2026 14:12 EAT
Kenya Revenue Authority headquarters in Nairobi
The Kenya Revenue Authority (KRA) collected Sh2.04 trillion in revenue by the end of the third quarter of the 2025/2026 financial year, falling short of its Sh2.12 trillion target. The performance leaves a deficit of approximately Sh84 billion, reflecting ongoing challenges in meeting revenue expectations.
Despite the shortfall, the tax authority surpassed the Sh2 trillion milestone, signaling continued growth in revenue collection. The achievement highlights resilience in the tax system even as economic pressures persist across the country.
Domestic taxes remained the primary driver of revenue, with strong contributions from Pay As You Earn (PAYE), Value Added Tax (VAT), and corporate income tax. These sources continue to anchor government revenue due to their close link to employment levels, business performance, and consumer spending.
Customs and border control collections also played a significant role, supported by import duties, excise taxes, and VAT on imports. Improved efficiency in cargo clearance and increased trade volumes contributed to the steady inflows from this segment.
KRA credited its performance to enhanced compliance efforts, including the adoption of digital tax systems and stricter enforcement measures. The authority has been working to broaden the tax base and reduce leakages through technology-driven monitoring.
However, the revenue gap points to broader economic challenges, including high inflation, rising cost of living, and reduced purchasing power among consumers. These factors have dampened economic activity, ultimately affecting tax yields.
The government relies heavily on tax revenues to finance its budget, fund development projects, and service public debt. Any shortfall in collections increases fiscal pressure and may force adjustments in spending or borrowing strategies.
KRA remains optimistic about closing the gap in the final quarter of the financial year, citing ongoing reforms and expectations of improved economic activity. The authority is focused on strengthening compliance and enhancing efficiency to meet its annual revenue targets.
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FELIX MAKONA
FACT FINDER AND DATA DRIVEN JOURNALIST. DATA MINING AT IT'S BEST. GET FACTS RANGING FROM MATTERS DISABILITY AND INCLUSION, POLITICS, ECONOMY, SPORTS AND GENERAL NEWS AROUND THE WORLD