KRA Woes: Kenya's Taxman Owes Landlords And Suppliers Over KSh 9b, Unable To Operate

• The National Treasury's budget statement presented in parliament saw Kenya Revenue Authority (KRA) allocated KSh 25.97 billion
• KRA disputed the allocation for the financial year 2024/25, saying it is not enough to run its operations
• Commissioner General Humphrey Wattanga told the National Assembly Committee on Finance that the allocation will only cover staff costs at over KSh 24 billion

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Kenya Revenue Authority (KRA) has asked the government to increase its allocation for the fiscal year 2024/25.

This is after the taxman's pending bills hit over KSh 9.45 billion in the financial year ending June 30, 2024.

Why KRA may fail to operate

KRA Commissioner General Humphrey Wattanga told the National Assembly Committee on Finance that if they approve Treasury's current allocation, KRA will not be able to finance its operations.

Business Daily reported that the Treasury allocated KSh 25.97 billion to the taxman in the 2024/25 budget, whereas its staff costs stand at KSh 24.5 billion.

"We urgently require intervention to ascertain business continuity in the financial year 2024/25. The Treasury should consider the authority's allocation at KSh 35 billion or 2% of the total revenue target," said Wattanga.

How much does KRA owe to landlords and suppliers?

Wattanga broke down the pending bills, comprising KSh 522 million owed to landlords, KSh 1.2 billion owed to staff medical service providers and KSh 792 million owed to ICT system licence and maintenance service providers.

Other pending bills include scan leasing (KSh 796 million), infrastructure expenses (KSh 173.9 million), and Excisable Goods Management System debt (KSh 4.47 billion).

Electronic seals maintenance (KSh 867.7 million), motor vehicle leasing and repairs (KSh 183.2 million), utilities and general supplies (KSh 424.1 million).

The commissioner lamented the pending bills have hindered KRA's tax collection obligations in the current financial year.

KRA tax collection targets

In March 2024, the Parliamentary Budget Office (PBO) projected that the Kenya Revenue Authority (KRA) will miss its 2023–2024 financial year (FY) revenue collection target.

PBO attributed the anticipated shortfall to underperformance in tax collections since July 2023.

In the first half of the 2023–24 financial year, total exchequer revenue fell short of the target by KSh 187.6 billion.

Proofreading by Mercy Nyambura Guthua, journalist and copy editor at TUKO.co.ke

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Humphrey Wattanga said KRA may not be able to function under current budget allocation.

KRA Woes: Kenya's Taxman Owes Landlords and Suppliers over KSh 9b

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