The Kenya Revenue Authority (KRA) has attributed the sharp increase in revenue collection from the betting industry to the integration of betting companies into its tax system.
In its report for the 2022-23 financial year, the Authority said it managed to collect Sh6.640 billion against a target of Sh 5.715 billion.
A total of Sh 925 million was collected in surplus representing a performance rate of 116.2 percent meaning a growth of 30 percent as it was in the 2021-22 financial year.
“The integration has streamlined tax remittance from the sector and scaled up revenue collection,” Authority’s acting Commissioner General Rispah Simiyu said in a statement.
On the other hand, Pay As You Earn (P.A.Y.E) emerged as the leading earner to the taxman posting Sh494.979 billion in the year, which is a growth of 7.2 percent.
The performance, KRA says, was mainly driven by remittance from private firms and the public sector growing by 10.7 percent and 1.9 percent respectively.
Corporation tax performed at 94.2 percent with a collection of Sh263.819 billion representing a growth of 9.0 percent over the last financial year.
“This was driven by increased remittance from sectors like finance and insurance, Information and communication, manufacturing, wholesale and retail trade and electricity, oil, and gas.
These sectors combined contributed 77.8 percent of the corporation taxes.
Additionally, Sh 68.124 billion was collected on domestic excise which is 2.8 percent translating to a performance rate of 91.4 percent attributed to growth in revenue on cosmetics, soft drinks (8.0 percent), beer (0.4 percent), bottled water (4.4 percent), tobacco (2.8 percent) and wines and spirit (8.7 percent).
Introduction of the Tax Invoice Management System (TIMS) which has enhanced compliance among VAT-registered taxpayers saw domestic VAT rise to Sh272.452 billion reflecting a growth of 11.3 per cent compared to the previous year.
VAT collection jumped to 18.0 percent in February –June this year following the implementation of the system and e-TIMS from an earlier slower growth of 6.7 percent in the first seven months of the year.
KRA anticipates that this will rise in the new financial year once the full rollout of eTIMS is realized amongst the VAT-registered taxpayers.
Meanwhile, domestic revenue registered a revenue growth of 8.5 percent collecting Sh1.407 trillion against a target of Sh1.481 trillion translating to a performance rate of 95.0 per cent.
Customs taxes recorded a 3.5 percent to record a performance rate of 95.6 percent with a collection of Sh754.090 billion.
The agency has at the same time set a target of collecting Sh2.768 trillion by the end of this financial year and surpassing the Sh3 trillion mark by 2024-25.
To achieve this, it has said it will implement both tax administrative measures and tax policy reforms.
“KRA is confident that it will achieve this target and enable the government to finance its Bottom-Up Economic Transformation Agenda (BETA) and sustain the country’s economy,” Simiyu further states in the statement.