Kenya Revenue Authority (KRA) recorded a rare drop in tax collections in the first two months of this year, reflecting the subdued business activity amid fears the coronavirus pandemic will negatively impact the economy hard.
The latest data from the Treasury indicates that tax collections reduced from Sh219.56 billion to Sh216.06 billion in January and February. This is the first drop in recent times and reflects lower collections from businesses struggling with lower sales and workers plagued by stagnant pay.
Treasury Secretary Ukur Yatani expects the under-performance in revenue collection to deepen in the three months to June as effects of travel and mass gathering as well as the night curfew imposed last week to curb the spread of coronavirus take a toll on the economy.
Both imports as well as domestic consumption have slowed down as a result of the impact of the virus, hitting taxes.
“We are looking at under-performance, as a result of just Covid-19, of about 70 billion (shillings)… in terms of revenue for the remaining three months (of this financial year),” Mr Yatani said.