The Kenya Revenue Authority (KRA) has announced that it collected a total of KES 5.328 billion from Digital Service Tax and VAT on Digital Market Supply in the financial year 2022/2023. This represents a significant growth of 207.9% compared to the previous year.
The authority said that the implementation of these digital taxes has brought inclusivity in tax payment, especially from non-residents. It also indicated the success of KRA’s efforts to ensure that the digital economy contributes its fair share of taxes.
KRA also recorded a 6.7% growth in overall revenue collection in the financial year 2022/2023, despite a global economic slowdown and a domestic growth rate of 4.8%. Revenue collection has increased by 37% in the last five years, reaching KES 2.166 trillion in 2022/23.
The authority surpassed the previous year’s collection by KES 135 billion, with exchequer revenue growing by 6.9% to KES 2.030 trillion, and revenue collected on behalf of other government agencies amounting to KES 136.390 billion.
The economic environment was influenced by a projected GDP growth of 5.8% in 2022/23, higher inflation, and a depreciating Kenya Shilling against the dollar.
Domestic taxes grew by 8.5%, and customs taxes grew by 3.5% compared to the previous year. However, special exemptions for essential products affected customs taxes, with exemptions and remissions growing by 39.7%.
Key tax heads, such as excise on betting, domestic VAT, corporation tax, and PAYE, showed positive growth, reflecting improved compliance and economic recovery.
KRA attributed its revenue growth to various strategies such as customer support programs, tax base expansion, taxation of the digital economy, tax at source, debt collection initiatives, and a dispute resolution framework.
Technology also played a significant role, with KRA leveraging it to simplify tax processes and facilitate trade. The authority said that it will continue to invest in technology to enhance service delivery and efficiency.
KRA aims to collect KES 2.768 trillion by the end of the 2023/2024 financial year and surpass KES 3 trillion by 2024/2025.
The authority plans to implement tax administrative measures and tax policy reforms, including the National Tax Policy and the Medium-Term Revenue Strategy.