KBC Channel 1

Tag: Taxes

  • Kenya ratifies 50pc VAT reduction on fuel until July

    Kenya ratifies 50pc VAT reduction on fuel until July

    President William Ruto has assented to the Value Added Tax Amendment Bill to cushion consumers from further increases in fuel prices within the next three months.

    The law which is effective April 15, 2026 has lowered the VAT on super petrol and diesel by half from 16pc to 8pc with  a litre of super petrol declining by Ksh. 9.37 per litre and diesel by Ksh. 10.21 per lire.

    “We will do everything possible to cushion Kenyans from the economic shocks arising from the conflict in the Middle East,” said President William Ruto via his official X account after assenting to the bill.

    “We have taken this urgent and necessary step because a surge in the cost of fuel has a ripple effect on consumer goods and services,” he added.

    The reduction in VAT rate on petroleum products follows a public outcry after the Energy and Petroleum Regulatory Authority (EPRA) hiked pump prices in their review on April 14 where a litre of super petrol was increased by Ksh 28.69 per liter and diesel Ksh 40.30 per litre while kerosene remained unchanged.

    According to EPRA, the level of subsidy on kerosene has also been reduced from Ksh 108.10 per litre to 96.56 per litre.

    Effective April 15, consumers in Nairobi will now pay a maximum of Ksh 197.60 for a litre of super petrol, Ksh 196.63 for a litre of diesel and Ksh 152.78 for a litre of kerosene until May 14.

    However, the VAT Amendment Act which has reduced VAT on super petrol and diesel by 800 basis points will offer consumers temporary reprieve until July 14 as the government seeks to ease adverse effects on cost of goods and services due to the fuel price increase.

    “While the reduction in VAT will be in operation for 90 days, we have inserted a provision which will enable us to extend the application of the law should the conflict in the Gulf continues to affect oil prices,” said President Ruto.

    The increase in fuel prices was triggered by the ongoing conflict in the Middle East which has created a shock in the global supply chain of petroleum and petroleum products.

    Kenya which relies heavily on imported fuel from the gulf under government-to-government by three oil state owned oil marketers from the region saw the cost of imported fuels rise significantly.

    Average landed cost of super petrol went up by 41.53pc per cubic metre in March after the war broke out while that of diesel and kerosene went up by 68.72pc and 105.15pc respectively.

  • Excise duty collection from betting grows to Ksh 13B

    Excise duty collection from betting grows to Ksh 13B

    Excise duty from betting services grew to Ksh 13.2 billion in a year to June from Kshs. 10.6 billion collected in the last financial year.

    Kenya Revenue Authority (KRA) says during the 2024/25 fiscal year, betting tax surpassed the set target after collecting Kshs. 5.7 billion against a target of Ksh 5.5 billion.

    This translates to a performance rate of 103.7pc and a growth of 22pc.

    The performance is attributed to KRA’s Taxation at Source initiatives specifically, integration of betting firms’ systems to KRA’s systems, enabling real-time monitoring of transactions.

    This has enhanced compliance and transparency and facilitated effective collection.

    The growth in revenue comes at a time when the nation continues to face economic pressure.

    According to the 2025 Economic Survey, Kenya’s economy grew by 4.7pc in 2024, down from 5.7pc in 2023, reflecting broader global slowdowns and local pressures on consumption and credit.

  • Survey: Kenyans support high alcohol taxes amid concerns over underage drinking

    Survey: Kenyans support high alcohol taxes amid concerns over underage drinking

    Majority of Kenyans have backed the push for higher taxes to reduce alcohol consumption and related harms, a new report reveals.

    The survey, Public Opinion Attitudes and Support for Government Action on Alcohol Use in Kenya shows that 65pc of Kenyans believe that tax increases on alcohol would be effective in reducing consumption among vulnerable and high risk groups such as heavy drinkers, young people and lower income earners

    The support would increase to 85pc and 79pc if the funds were dedicated to healthcare, alcohol treatment and support services respectively.

    The poll commissioned by RESET Alcohol which brings together national governments, civil society, research organizations, and global leaders in public health and alcohol policy indicates more support if the tax revenues would be invested in education, housing or programmes cushioning the poor.

    Underage drinking

    Additionally, the findings expose a disturbing trend of increased alcohol use among minors attributed to among other factors easy access enabled by unrestricted online sales and advertisements that glamorise drinking.

    “There is a clear support for policies that address underage drinking. It is unfortunate online outlets are not keen on verifying buyers’ information, hence young people end up having unlimited access and availability due to lack of proper checks” regrets Benjamin Odhiambo of SCAD Kenya who presented the report.

    While calling for geofencing to regulate online sales, Odhiambo observed that the grim statistics have sparked fears among most parents and caregivers (90 pc of the respondents) over the potential alcohol use by their children in future.

    At the same time, he said 78pc of the 1,057 Kenyans interviewed admitted that alcohol consumption is a major problem that needs government action to tackle the significant public health and social challenges posed by continued abuse.

    Despite the negative health externalities, some stakeholders are unhappy with  Kenya’s delay in implementing health taxes in the last two years whereas new tax proposals based on alcohol content collapsed following the withdrawal of the contentious Finance Bill 2024.

    Consequently, the International Institute for Legislative Affairs (IILA) is calling for tax administration reforms with a view to increasing excise levied on tobacco and alcohol products to prevent harmful use and related health, social and economic consequences.

    “Kenya should forge forward in addressing the negative externalities of consuming alcohol by reforming the alcohol tax administration and ultimately increase excise taxes on these products with the hope of investing the taxes in health, research and public awareness activities” Fabian Oriri policy development officer at IILA, says.

    Speaking during an engagement with editors in Nairobi, Oriri rooted for an efficient tax policy that distinguishes between controversial and pro-people tax proposals.

    “Kenya should abandon the use of omnibus finance bill for tax proposals as part of the legislative strategy for the National Treasury…..tax proposals on alcohol under the impugned finance bill of 2024 should be enhanced and tabled in the National Assembly under the independent law-the excise duty act anytime before April 2025,” he said.

     

     

  • KRA nets Kshs 43.9B from the Tax Amnesty Programme

    KRA nets Kshs 43.9B from the Tax Amnesty Programme

    The Kenya Revenue Authority (KRA) says it collected a total of Kshs 43.9 billion under the Tax Amnesty Programme.

    According to the authority 1,064,667 taxpayers benefited from the programme which was concluded at the close of the 2023/24 financial year on June 30, 2024.

    “Through the tax amnesty programme, KRA waived penalties and interest amounting to Kshs. 507.7 billion benefiting 3,115,393 taxpayers between 1st September 2023 and 30th June 2024,” said Rispah Simiyu, KRA Commissioner for Domestic Taxes.

    Highest collection was reported in June where the authority managed to collect a total of Ksh 15.1 billion

    The tax amnesty programme was introduced through the Finance Act, 2023 allowing taxpayers to apply for amnesty of penalties and interests on tax debt for periods up to December 31, 2022.

    “The waivers include those that were offered automatically after taxpayers filed their returns, declared and paid their principal taxes,” added Simiyu.

    Under the amnesty programme, taxpayers were only required to pay the principal tax amount of their outstanding tax debts.

  • KRA revenue collection for FY2023/24 up 11pc to Ksh 2.4T

    KRA revenue collection for FY2023/24 up 11pc to Ksh 2.4T

    The Kenya Revenue Authority (KRA) has reported 11.1pc increase in tax collection to Ksh 2.41 trillion for the financial year 2023/24.

    Though this was an improvement compared to Ksh 2.17 trillion collected in the previous year, the taxman missed the target as it managed to collect 95.5pc of projected revenues.

    “The year under review was characterized by multiple economic shocks that included depreciation of the Kenya Shilling against the US Dollar, rising bank lending rates and international conflicts that disrupted supply chains, among others. These factors affected revenue mobilization efforts,” said Humphrey Wattanga, KRA Commissioner General.

    According to the authority, the Exchequer revenue grew by 9.5pc to Ksh 2.22 trillion from Ksh 2.03 trillion collected in the previous financial year translating to a collection performance rate of 95.8pc.

    Domestic taxes grew 14.4pc to Ksh 1.61 trillion against a target of Ksh 1.68 trillion while customs revenue hit Ksh 791.37 billion after growing by 4.9pc.

    “Despite overall import values increasing by 11.7pc, oil and non-oil taxes performance were in part affected by growth in exemption and remissions, which grew by 23.8pc, driven by special exemptions accorded to some food commodities. These products account for 40.8pc of exemptions accorded in the FY 2022/2023,” added Wattanga.

    Value Added Tax (VAT) collection beat target by Ksh 6.33 billion with a collection of Ksh 314.16 billion which grew by 15.3pc when compared to last year.

    KRA attributes increase in domestic VAT collection to the implementation of the Electronic Tax Invoice Management System (eTIMS), which has enhanced compliance among VAT registered taxpayers.

    With the introduction of eTIMS which also targets small enterprises, average monthly collection growth rose to 17.5pc.

    In the second half of the year to June 30, 2024 when eTIMS was introduced, the monthly average collection stood at Ksh 26.25 billion against the monthly average collection of Ksh 23.6 billion collected in the first half of before rollout of eTIMS.

    Capital Gains Tax grew 49.5pc to Ksh 8.38 billion while Corporation tax grew by 4.9pc to Ksh 278.16 billion on account of increased remittances from sectors like wholesale and
    retail trade which grew 10pc, electricity, oil, and gas 11pc, transport and storage 118.5pc, accommodation and food service 96.6pc and education 29.5pc.

    On the other hand, Pay As You Earn (P.A.YE) grew 9.7pc to Ksh 543.19 billion while excise tax increased by 8.1pc to Ksh 73.62 billion.

    Non-oil customs revenue also reported a growth of 1.9pc during the year under review to Ksh 490.6 billion while taxes from imported oil surged by 10.3pc to Ksh 300.77 billion.

  • State to reduce taxes once economy recovers, Mudavadi says

    State to reduce taxes once economy recovers, Mudavadi says

    Prime Cabinet Secretary Musalia Mudavadi says the government will consider reducing taxes in various sectors once the economy recovers.

    In an exclusive interview this morning with KBC Radio Taifa, Mudavadi defended the perceived high taxes introduced by the government, saying they were inevitable owing to the sorry state the economy was in.

    He appealed for patience as the government endeavors to lower the cost of living and improve the lives of the common mwananachi.

    Mudavadi urged Kenyans to be patriotic and not to slander their nation.

    Mudavadi at the same time defended the new loans being taken by the government from international financial institutions such as the International Monetary Fund (IMF) and the World Bank, saying they are friendlier and of low interest.

    He reiterated the government’s commitment to lowering the country’s debt.

  • Humphrey Wattanga appointed new KRA Commissioner General

    Humphrey Wattanga appointed new KRA Commissioner General

    Humphrey Wattanga has been appointed the new Kenya Revenue Authority (KRA) Commissioner General effective August 22, 2023.

    Wattanga who has been appointed to the position by National Treasury and Economic Planning Cabinet Secretary Prof. Njuguna Ndung’u will serve a three year term.

    He succeeds Githii Mburu who resigned from the position in  February this year after serving three years m, seven months.

    Rispah Simiyu who has been the acting commissioner general since February 23, 2023 following the departure of Githii Mburu.

    Wattanga holds a Masters in Business Administration from the Wharton School of Finance from the University of Pennsylvania, USA, and a Bachelor’s degree in Biochemistry (cum laude) from Harvard University, USA.

    He has over 15 years’ global experience serving as a business development, corporate finance and transaction adviser to private equity entities, private sector companies, development finance institutions, governments and public organizations.

  • KRA tax collection up 6.7pc to Ksh 2.17T, but below target

    KRA tax collection up 6.7pc to Ksh 2.17T, but below target

    The Kenya Revenue Authority (KRA) has said it collected Ksh 2.17 trillion in a year to June 30, 2023, which is a 6.7pc growth from Ksh 2.031 trillion it collected in the previous fiscal year.

    While year-on-year tax receipts grew by Ksh 135 billion, the authority still came short of its revenue collection target of Ksh 2.2 trillion.

    According to KRA Acting Commissioner General Rispah Simiyu, the revenue performance was impacted by the domestic economy which contracted to 4.8pc as a result of drought witnessed in the better part of last year and the raging Russia-Ukraine which continues to disrupt commodity supply chain.

    “The revenue collection signifies a performance rate of 95.3pc against the target. This is the second year in a row that KRA has surpassed the two trillion mark,” said Simiyu.

    During the year under review, domestic tax collection grew by 8.5pc to Ksh 1.407 trillion against a target of Ksh 1.481 trillion, which translates to a performance rate of 95pc.

    On the other hand, customs revenue grew 3.5pc to reach Ksh 754.1 billion, a performance rate of 95.6pc.

    “Despite overall import values increasing by 15.3pc, customs taxes performance was in part affected by growth in exemptions and remissions, which grew by 39.7pc, driven by special exemptions accorded to rice, maize, sugar, and cooking oil,” she stated.

    According to the authority, the special exemptions on the products which were part of the government’s strategies to mitigate against adverse effects of drought and to reduce the cost of living accounted for 24.8pc of exemptions accorded in the FY2022/2023.

    Collection from excise on betting which was charged at the rate of 7.5pc in the last financial year grew 116.2pc to Ksh 6.6 billion against a target of Ksh 5.72 billion.

    “The performance is attributed to the integration of the betting companies into the KRA tax system. The integration has streamlined tax remittance from the sector and scaled up revenue collection,” added Simiyu.

    Domestic Value Added Tax (VAT) collection grew 11.3pc to Ksh 272.45 billion while corporation tax increased 9pc to Ksh 263.82 billion on account of  increased remittance from among others sectors, finance and insurance, ICT, manufacturing, wholesale and retail trade, and energy. The sectors contributed 77.8pc of the corporation taxes, KRA said.

    Pay As You Earn (P.A.Y.E): P.A.Y.E registered a growth of 7.2pc with a collection of Ksh 494.98 billion during the fiscal year.

    KRA says its tax base expansion efforts during the period resulted to additional revenue amounting to Ksh 14.65 billion.