The Kenya Revenue Authority (KRA) is set to receive an additional Sh12.9 billion in funding to support tax administrative measures aimed at improving compliance and expanding the tax base, according to a new report from the National Treasury. This will bring the total KRA budget allocation from the National Treasury to Sh36.6 billion, marking an increase from the initial Sh23.7 billion awarded for the 2023/24 fiscal year.
The administrative measures outlined in the Medium Term Revenue Strategy (MTRS) focus on expanding the tax base by bringing new taxpayers into the system, simplifying tax procedures, and ensuring timely tax refunds. The MTRS will be implemented over a three-year period from July 2024 to June 2027.
The National Treasury, in the 2024 Draft Budget Policy Statement (BPS), emphasized that tax policy reforms will be implemented through the Finance Acts and Regulations, starting with the Finance Act, 2024, without requiring additional resources from the Exchequer.
It is important to note that the National Treasury had previously reduced the KRA’s budget for the 2023/24 fiscal year to Sh23.7 billion, down from Sh26.3 billion in the previous period.
Looking ahead, the KRA is expected to collect Sh2.96 trillion in ordinary revenue in the 2024/25 fiscal year, up from an estimated Sh2.6 trillion in the current year. This expected increase is attributed to various revenue-generating measures outlined in the MTRS, including:
