In Summary

  • Kenyan tax collection hit a record Kshs 2.1 trillion in 2022/23, a jump of over half a trillion since 2018.
  • New taxes and a wider tax net boosted revenue, but only 3% of Kenyans pay income tax, raising concerns about fairness.
  •  Broadening the tax base and ensuring responsible use of funds are key to maximizing the benefits of this revenue increase.

Kenyan tax revenue has increased by over half a trillion shillings between 2018 and 2023, according to data from the Kenya Revenue Authority (KRA).

There is a steady increase in revenue collection over the past five financial years.

READ also:KRA Commits to Enhance Efficiency at Ports of Entry

Revenue Soars

In the financial year 2022/2023, the KRA collected Kshs 2.166 trillion, which is an increase of Kshs 135 billion from the previous financial year.

The increase in tax revenue is attributed to a number of factors, including the implementation of new taxes such as the Digital Services Tax and the Voluntary Tax Disclosure Program.

The KRA has also been working to expand the tax base by bringing more taxpayers into the fold.

This growth in tax revenue is good news for the Kenyan government, as it will provide much-needed funds for financing development projects.

Fairness concerns

However, it is important to note that only a small percentage of Kenyans pay income tax.

According to a recent report by the TIFA Research Institute, only 3% of Kenyans earn above Kshs 50,000 per month.

This means that the burden of taxation falls disproportionately on a small number of people.

The windfall is attributed to a multi-pronged approach by the KRA.

New levies like the Digital Services Tax and an amnesty program for tax evaders boost income.

Expanding the tax net by identifying previously untaxed individuals and businesses also play a role.

The Kenyan government needs to find ways to broaden the tax base so that more people contribute to the country’s development.

This could be done by introducing new taxes on wealth or consumption, or by improving tax collection efficiency.

It is also important to ensure that tax revenue is used effectively and efficiently.

Only then will Kenyans see the benefits of paying taxes.

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