Times Tower, KRA headquaters.[Photo/nation]
The Kenya Revenue Authority (KRA) has been handed a gigantic task to raise Sh200 billion more in the forthcoming 2018/19 financial year to raise the unprecedented Sh1.68 trillion to fund the government’s “Big Four” agenda and other projects.
According to the 2018 draft Budget Policy Statement (BPS), the revenue collection targets, including Appropriation-in-Aid (A-in-A) is projected at Sh1.84 trillion from Sh1.64 trillion in the current financial year (2017/18).
The ordinary revenues are projected at Sh1.68 trillion in 2018/19 financial year which begins on July 1 up from Sh1.48 trillion in 2017/18.
KRA has on several occasions in the past failed to meet revenue targets leaving the National Treasury to reach out to domestic and external lenders to bridge the revenue deficits.
For instance, by the end, November last year, a month to the end of half year, the cumulative revenue including A-I-A collected amounted to Sh558.4 billion against a target of Sh611.0 billion.
The shortfall Sh52.6 billion arose after KRA failed to collect Sh29.7 billion of ordinary revenues while the ministries also failed their target of Sh22.9 billion in Aid in Appropriation.
According to the BPS, the shortfall in ordinary revenue was attributed to the underperformance in all the broad categories of ordinary revenues except import duty.
Much of the deficits, which has forced the government to borrow heavily in the local and international markets, have been credited to the failure of the main tax heads like income tax and excise duty.
Treasury also blamed the prolonged drought much of last year, the toxic general and repeat presidential elections together with the strikes by the university staff and medical professionals for the slump.
Despite the huge task ahead, the Treasury is bullish on its quest to have the taxman meet the revenue targets and has arranged a number of measures to contain revenue leakage while at the same time creating new pathways to net extra revenues.