Kenya Revenue Authority (KRA) missed the collection target for the ended financial year to June 30, 2025 by Sh48billion, hurt by a tough economy that cut disposable income among consumers.
New data published by the Treasury on Friday showed that tax receipts stood at Sh2.257 trillion for the full year, compared to a revised estimate of Sh2.305 trillion.
The realised collections are much lower than the original target set at Sh2.745 trillion at the beginning of the fiscal cycle.
The Treasury had already signalled revenue collection would underperform in the financial year, citing disruptions, including street protests that first emerged in June last year during the opposition to the Finance Bill, 2024.
“The revenue shortfalls have resulted from several factors. One is the social unrest that was witnessed between June and August, which affected businesses,” National Treasury Director General for Budget, Fiscal and Economic Affairs Albert Mwenda said previously.
“Second is the withdrawal of the Finance Bill, 2024, from which we expected to collect approximately Sh344.3 billion.”
According to the National Treasury statement of actual revenue and net exchequer issues as of June 30, 2025, total receipts, including non-tax revenues, domestic and external revenues, were off the mark by Sh213 billion, mirroring partially unfunded budget items for the fiscal year.
Non-tax revenues, which mainly consist of fines and other penalties, missed the target by Sh19.9 billion after totalling Sh171.1 billion against a revised estimate of Sh191 billion.
Receipts from domestic borrowing, external loans, and grants were meanwhile off the mark by Sh13 billion and Sh20.5 billion respectively at Sh1.07 trillion and Sh481 billion each.
The exchequer is expected to remain under pressure to reach the tax target in the new fiscal year that began on July 1, following the resurgence of disruptive street protests, which recently brought economic activity to a standstill.
The National Treasury has tabulated tax revenues at Sh2.754 trillion for the 2025/26 fiscal year, which runs to June 30, 2026, which suggests a 22 percent increase in collections in the new cycle from the 2024/25 nettings.
KRA reported having surpassed its revenue target of Sh2.55 trillion in the 2024/25 cycle at Sh2.571 trillion, marking a 6.8 percent increase in nettings in the backdrop of a tough economic environment.
KRA’s total collections, however, differ from the exchequer numbers because the taxman includes nettings from other revenue heads such as agencies that are not deemed as revenues of the National Treasury.
KRA is betting on multipronged strategies to improve revenue collection, including the simplification of current processes, the adoption of technology, and the restructuring of its organisation.
“KRA has continued to leverage disruptive technology to enhance efficiency, transparency, and effectiveness in revenue collection,” KRA said in a statement earlier this month.
“These innovations are part of KRA’s broader digital transformation and tax modernization strategy to improve compliance, reduce leakages, and enhance taxpayer experience.”
KRA says it has implemented organisational restructuring within its functional areas of revenue, technology, and service to create an agile and responsive tax administration framework, strengthen digital infrastructure, and improve taxpayer engagement and support.
