Economy

Payroll taxes in April fall short of revised target on tighter Covid curbs

times-tower
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Summary

  • PAYE taxes for April were, however, 5.3 per cent more than a year ago after the maximum tax rate of 30 per cent was in January expanded to start applying from a salary of Sh32,333 compared with Sh47,057 previously.
  • The payroll taxes, paid by the 9th of the following month, was the notable major revenue category that underperformed KRA’s target for April.

Payroll taxes fell short of the revised target for April by 1.5 per cent, signalling jobs underperformed government projections ahead of tighter Covid-19 containment measures imposed on five counties to stem the deadly third wave of infections.

The Kenya Revenue Authority (KRA) collected Sh36.95 billion in pay-as-you-earn (PAYE) during the month, a 98.5 per cent performance before the closure of bars and restriction of restaurant services to take-away orders in Nairobi, Kiambu, Machakos, Nakuru and Kajiado.

Other businesses in the five counties, which were on lockdown, scaled-down operating hours after night-time curfew was lengthened by two hours to start from 8pm, resulting in loss of jobs.

PAYE taxes for April were, however, 5.3 per cent more than a year ago after the maximum tax rate of 30 per cent was in January expanded to start applying from a salary of Sh32,333 compared with Sh47,057 previously.

The payroll taxes, paid by the 9th of the following month, was the notable major revenue category that underperformed KRA’s target for April.

Total collections exceeded the Sh170.19 billion revised target for April by 3.8 per cent to Sh176.66 billion, marking the fifth month in a row that the KRA has outperformed monthly goals.

The April collections — taxes and agency fees and levies such as Road Maintenance Levy and Petroleum Development Fund — were 22.63 per cent more than Sh144.06 billion posted in the same month last year at the height of Covid restrictions.

The KRA attributed the performance to “enhanced by the sustained implementation of compliance efforts, revenue enhancement initiatives and improved service delivery”.