TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers profound insights into Kenyan and global economic trends.

The Kenya Revenue Authority (KRA) collected KSh 1.243 trillion in the first half of the 2024/2025 financial year, representing a 4.5% rise from KSh 1.189 trillion collected during a similar period in the previous year.

Agency revenue, collected on behalf of other government entities, amounted to KSh 122.872 billion, while exchequer revenue, received on behalf of the National Treasury, totalled KSh 1.12 trillion.

With a performance rate of 121.3%, Citizen TV reported that agency revenue exceeded its target of KSh 101.316 billion.

Despite this growth, several economic issues constrained the amount of tax revenue collected. The Gross Domestic Product (GDP) growth declined to 4% in Q3 2024, down from 6.1% in Q3 2023 and 4.6% in Q2 2024.

The Purchasing Managers Index (PMI), which averaged 49.2 points between July and December 2024, also weakened during the period under review.

Given the substantial importance of imports to customs income, a 0.6% drop in import values over the six months of FY 2024–2025 also affected tax collection.

Additionally, the performance of some industries was impacted by government austerity measures, especially those on VATable goods.

KRA marked International Customs Day (ICD) 2025 on Friday, January 24, honouring its officers for the outstanding revenue growth.

In the financial year ending June 2024, KRA customs revenue grew by 4.9% to KSh 791.368 billion compared to the previous financial year.

KRA commissioner general Humphrey Wattanga applauded customs officers led by commissioner customs and border control, Lilian Nyawanda for doing a good job.

Commissioner Nyawanda revealed that the authority has so far collected KSh 429 billion in the current financial year.

Treasury proposed a KSh 4.4 trillion budget for the 2025/26 financial year, representing a notable increase from the previous year’s budget.

The national government will receive KSh 2,749.5 billion, comprising 61.3% of the budget, while county governments will be allocated KSh 410.8 billion.

Parliament will now review the budget proposal, scrutinising allocations and revenue projections to ensure alignment with Kenya's priorities.

In related news, the Treasury's 2025 Draft Budget Policy Statement revealed that the fiscal deficit will be financed by net external loans of KSh 213.7 billion and and net domestic financing of KSh 545.8 billion.

President William Ruto's administration expects to collect KSh 3 trillion in ordinary revenue from taxes and levies.

The government will spend the entire amount to fund development expenditures even as it risks defaulting on its loans.

Proofreading by Asher Omondi, current affairs journalist and copy editor at TUKO.co.ke.

Source: TUKO.co.ke