The Kenya Revenue Authority (KRA) has reported a 6.1% increase in revenue collection for the 2024/2025 financial year, reaching Sh1.243 trillion by 31 December 2024. This marks an improvement over the previous year’s figure of Sh1.189 trillion for the same period.
The growth is largely attributed to the implementation of strategic reforms and contributions from key sectors such as energy and manufacturing.
KRA Commissioner General Humphrey Wattanga highlighted that the performance surpassed the initial target of Sh2.189 trillion, achieving 96.5% of the expected revenue. Speaking to the media, he said: “This growth reflects the effectiveness of the ongoing reforms and enhanced compliance measures.”
The revenue increase was driven by several factors, including the introduction of Centralised Release Operations in Customs and the VAT Auto-Population of Returns, both of which improved efficiency and tax reporting accuracy.
Domestic taxes alone amounted to Sh1.386 trillion between July and April of the 2024/2025 fiscal year, marking a 4.7% increase compared to the previous year. Additionally, customs revenue grew by 9.1%, reaching Sh 722.7 billion.
The energy and manufacturing sectors were among the key contributors to this growth. VAT collections from oil marketers increased due to stable fuel prices and improved enforcement measures. The manufacturing sector—particularly producers of consumer goods such as sugar, soft drinks, and cement—saw higher tax remittances as a result of strong domestic demand and improved tax reporting.
Despite these gains, KRA faced several challenges, including slower Gross Domestic Product (GDP) growth, which placed additional pressure on revenue mobilisation. The country’s GDP grew by just 4% in Q3 2024, compared to 6% in the same quarter the previous year.
A 1.6% decline in import values signalled reduced domestic demand, while high commercial lending rates continued to restrict private sector borrowing.
Wattanga also noted that although the Central Bank of Kenya (CBK) reduced its base lending rate to 10.75%, commercial banks maintained significantly higher rates, averaging 17.22%. This disparity has continued to hinder private sector investment and access to credit.
In response, KRA implemented a range of reforms aimed at enhancing revenue collection. The Centralised Release Office, for example, significantly improved the cargo clearance process, contributing to a notable 22.6% increase in customs revenue by March 2025.
Similarly, the introduction of the Electronic Rental Income Tax System (eRITS) streamlined tax filing for landlords and property owners, making compliance easier.
KRA’s proactive approach also included the roll-out of the Electronic Tax Invoice Management System (eTIMS), which has helped curb VAT fraud by digitising invoicing and improving transparency.
Furthermore, the tax amnesty programme, which encouraged taxpayers to clear outstanding liabilities by offering relief from penalties and interest, generated Sh13.5 billion in revenue between December 2024 and April 2025. More than three million taxpayers have benefited, with KRA waiving Sh164.9 billion in penalties.
In conclusion, KRA’s 6.1% revenue growth reflects its continued efforts to reform tax administration and strengthen compliance. While economic challenges remain—including slow GDP growth and high lending rates—KRA’s investment in technology and strategic reforms positions the authority to play a pivotal role in supporting national development and addressing Kenya’s fiscal deficit.
– By Nusurah Nuhu
