🔥 Trending Kenya Revenue Authority: Key Tax Collection Insights and Trends

Kenya's revenue collection is primarily driven by tax revenues, with a significant focus on income tax, Value Added Tax (VAT), and excise duties. The Kenya Revenue Authority (KRA) has shown robust growth in its collections in recent financial years.

Key Revenue Sources

Income Tax

Income tax stands as the largest contributor to Kenya's ordinary revenue. For the Financial Year (FY) 2025/26, income tax is projected to contribute approximately KSh 1.28 trillion, which is nearly half of the total ordinary revenue expected to be KSh 2.75 trillion ². This category includes Pay As You Earn (PAYE), Corporation Tax, and other forms of income-related taxes. Salaried Kenyans, through PAYE, and corporate entities continue to be significant sources within this category ⁶.

Value Added Tax (VAT)

Domestic VAT is another crucial component of the KRA's collections. It represents a tax on goods and services at each stage of the supply chain. Along with PAYE, it has been instrumental in pushing KRA's overall collections ⁶.

Excise Duty

Excise duties, particularly on airtime and financial services, contribute significantly to the KRA's revenue. These are taxes levied on specific goods and services, often considered non-essential or luxury items ⁶.

Other Major Contributors

Other notable sources include:

• Wholesale and Retail Trade Sector: This sector contributed KSh 288 billion in FY 2025/26, showing a 10.3% growth from the previous year ⁶.
• Non-oil Revenues: These have been a major driver of tax revenue performance ¹.

Revenue Collection Trends and Performance

Kenya has demonstrated a strong upward trend in revenue collection.

Overall Growth

The KRA reported a record collection of KES 2.844 trillion for the FY 2025/26, marking a robust double-digit growth of 10.6% ⁵. This is a significant acceleration compared to the 6.8% growth recorded in the previous financial year, FY 2024/25 ⁴⁵. The increase amounted to KES 272.953 billion over the KES 2.572 trillion collected in FY 2024/25 ⁵. This performance underscores the resilience of Kenya's economy despite global challenges ⁹.

Financial Year 2025/26 Projections

For the FY 2025/26, the government anticipates raising KSh 2.75 trillion in ordinary revenue ². The KRA's tax collections hit a record $22 billion in FY 2025/26 ⁹.

County-Level Revenue

Counties also play a role in revenue generation through their "Own Source Revenue" (OSR). In the first nine months of the 2025/26 financial year, the 47 counties collectively collected KSh 53.88 billion in OSR ³. The main sources of revenue for county governments include property rates and entertainment taxes ⁷. Data on OSR collection per county for FY 2024/25 is also available ⁸.

Key Drivers of Growth

The strong performance in FY 2025/26 was primarily driven by personal income taxes and non-oil revenues ¹. The wholesale and retail trade sector also showed significant growth, contributing substantially to the total collections ⁶.