The Kenya Revenue Authority (KRA) is poised to intensify its revenue collection efforts in the coming months following an additional budget allocation of Sh11 billion.
Initially, KRA had requested Sh61.8 billion to operate optimally in pursuit of the government’s ambitious Sh3.6 trillion collection target. However, the National Treasury approved a budget of only Sh23.7 billion for the tax authority in the 2023/24 fiscal year, significantly below the requested amount.
This allocation, consisting of Sh23.6 billion for recurrent expenses and Sh122.4 million for development financing, fell short of the minimum two percent funding necessary to achieve the revenue target. Consequently, in light of KRA’s failure to meet quarterly and half-year targets amid challenging economic conditions, the exchequer has augmented the allocation.
The Treasury Principal Secretary informed MPs that an additional Sh10.982 billion would be disbursed to KRA to address staffing shortages, which have hindered revenue collection efforts. The funds will be included in the second supplementary budget, with Sh1 billion already released.
According to KRA’s corporate plan, an additional 4,650 staff are required for effective revenue mobilization and operations to meet targets. With the infusion of Sh11 billion, KRA will bolster its operations, focusing on recruitment, skill development, and technological advancements aimed at enhancing compliance efforts and expanding the tax base.
The authority sought allocations for various purposes, including staff compensation, recruitment, technology, and office space leasing. Additionally, KRA has initiated the implementation of the Common Reporting Standards (CRS) regulation of 2023, which mandates financial institutions to report information about foreign account holders to KRA.
Under CRS, banks and financial institutions are required to provide data on account stakeholders, addresses, tax identification numbers, and other relevant information to aid KRA’s efforts to combat tax evasion and illicit wealth accumulation.
The Kenya Bankers Association assures that all information will be submitted electronically using approved technology to ensure the security of shared data as mandated by the regulations.
