The Kenya Revenue Authority (KRA) narrowly missed its revenue target of KSh 2.189 Trillion after collecting KSh 2.112 Trillion as of 30th April, 2025.
According to the taxman, the miss in target was influenced by various economic indicators that directly drive revenue collection, including the slowdown in private sector activity that saw subdued demand.Revenue collection registered a growth of 6.1%, reflecting an upward trajectory in collection compared to Kshs 1.990 Trillion realized in the same period during the previous financial year.Despite a stronger shilling, the value of imports declined, particularly oil which dropped by 10.2%, while export earnings also shrank by 3.6%, driven by declines in key sectors such as tea (–18.6%) and horticulture (–6.2%).
Kenya’s GDP grew at a slower pace of 4.0% in Q3 2024, compared to 6.0% in Q3 2023. Similarly, the Purchasing Managers Index (PMI) averaged at 49.8 between July 2024 and April 2025, indicating a slowdown in private sector activities.
This subdued demand was further evidenced by a 1.6% drop in import values, an important indicator of domestic demand for both raw materials and consumer goods.
In spite of the Central Bank of Kenya lowering its base lending rate to 10.75%, commercial bank lending rates remained high, averaging 17.22%, as a number of banks had yet to adjust their rates. This disparity negatively impacted private sector borrowing and investment. However, there are strong indications that most banks are working towards ensuring compliance.
“Despite revenue mobilization being impeded by impacts from the above factors, KRA enhanced its compliance through various initiatives, the adverse effects from most of these indicators is beginning to dissipate as most of them start to experience a turnaround in the recent past,” KRA said in a statement.
Domestic taxes amounted to Kshs 1.386 Trillion between July – April 2024/25, translating to a revenue growth of 4.7% over Kshs 1.323 Trillion realized in July – April 2023/24.
Customs revenue collection also grew by 9.1% after registering a cumulative collection of Kshs 722.743 Billion, compared to Kshs 662.447 Billion that was collected in the same period of FY 2023/24.
Agency revenue (collected on behalf of other Government entities) collection amounted to Kshs 205.518 Billion, registering a performance rate of 111.8% against a target of Kshs 183.789 Billion.
This represents a growth of 37.1% compared to collection of Kshs 149.876 Billion realized in the same period of the previous financial year (2023/2024).
Exchequer revenue-collected on behalf of The National Treasury-amounted to Kshs 1.906 Trillion, reflecting a performance rate of 95.0% against a target of Kshs 2.006 Trillion. This represents a growth of 3.6% compared to collection of Kshs 1.840 Trillion that was collected in the same period in the previous financial year (2023/2024).