Kenya Revenue Authority headquarters. FILE PHOTO | NMG The Kenya Revenue Authority (KRA) posted a flat growth in collections for the first three months of the year, fresh Exchequer statistics show, reflecting a slowdown in business activities and jobs that started even before the Covid-19 pandemic shocks kicked in.
An analysis of government revenue data published by Treasury Secretary Ukur Yatani on Friday shows that total tax receipts in the January to March 2020 period amounted to nearly Sh340.67 billion, largely unchanged from Sh339.27 billion in the same period a year ago.
This is equivalent to Sh1.4 billion, or 0.41 percent, growth over the same period in 2019.
Companies reported a sharp slump in orders during the three-month period, with overall business deals in private sector hitting lowest levels in more than two years, according to a closely watched monthly survey.
The Stanbic Bank Kenya’s Purchasing Managers Index (PMI), a measure of monthly private sector activity, showed that in March, businesses in major sectors of the economy suffered a significant monthly drop in new orders for goods and services.
This was largely because of reduced demand as a result of shocks arising from the Covid-19 global pandemic.
Business conditions deteriorated at the sharpest pace last seen in October 2017 when the economy was similarly running at half-throttle due to tensions emanating from a fallout over the historic repeat presidential poll.
Depressed private sector deals usually reduce corporate profit and hurt job opportunities, leading to reduced corporation and payroll tax payments.
According to the latest PMI, firms have cut down on activities such as production and employment, with demand for inputs declining at the sharpest pace since late-2017.
Treasury data shows the impact on government revenue was felt more in January when tax receipts amounted to Sh118.35 billion compared to Sh124.98 billion in the same in 2019, a 5.60 percent or nearly Sh6.63 billion drop.
The collections by the KRA recovered in February, rising 3.3 percent to Sh97.70 billion compared with the same month in 2019, while tax receipts in March climbed Sh4.91 billion, or 4.1 percent, to Sh124.62 billion year-on-year.Overall, total tax collections in the first nine months of the current financial year ending in June rose Sh90.69 billion, or 9.77 percent, year-on-year to nearly Sh1.12 trillion against a full-year target of Sh1.7 trillion, the Treasury data shows.On the other hand, non-tax revenue — comprising cash surrendered by State firms, fines, levies, rent of buildings and forfeitures — stood […]
