KRA collects record VAT of Sh34.5 billion in January
The VAT performance boost was largely driven by the electricity sector, which saw a 121.6 per cent increase in remittances from oil marketers
The Kenya Revenue Authority (KRA) has reported collecting a record Ksh 34.5 billion in gross Value Added Tax (VAT) in January 2025, surpassing its January target of Sh33.995 billion by Sh556 million and achieving a performance rate of 101.6 per cent.
This marks the first time this tax head has collected such a sum in KRA’s history after the taxman collected Sh30.6 billion in January 2024, which is second highest.
KRA attributes the growth to its strategic reforms, with the growth being 12.8 per cent compared to the 2.7 per cent cumulative growth recorded in the first half of the 2024/2025 financial year (July-December 2024).
Rispah Simiyu, the KRA Domestic Taxes Commissioner, says the positive revenue performance is as a result of several reforms, including the implementation of VAT Auto-Population of Returns, which has contributed to enhanced revenues.
The auto-populated VAT return is a streamlined filing process where KRA pre-fills VAT returns with tax information from iTax, TIMS, eTIMS, and the customs business systems.
“This process simplifies VAT return filing, improves compliance, and enhances the customer experience. The initiative represents a paradigm shift from manually preparing VAT returns through data analysis to pre-populating them with integrated data from KRA’s digital platforms, easing the burden on VAT-registered taxpayers,” said Simiyu in a statement.
The VAT performance boost was largely driven by the electricity sector, which saw a 121.6 per cent increase in remittances from oil marketers.
“This growth was partly supported by stable fuel prices, which led to increased consumption for festive travel in December 2024. Additionally, a reduction in electricity prices, resulting from lower fuel costs and forex adjustment charges, led to higher demand,” she said.
The manufacturing sector also contributed to the positive performance, with notable improvements in remittances from producers of beer (10.5 per cent), soft drinks (115.6 per cent), tobacco (9.5 per cent), sugar (121.5 per cent), and wines and spirits (12.9 per cent).
Simiyu added: “These reforms reflect KRA’s ongoing commitment to simplifying tax processes. The authority is empowering businesses with more transparent, efficient, and user-friendly tax reporting systems, while exploring the potential of a fully web-based VAT return system and a taxpayer dashboard to provide real-time views of sales and purchases for each taxpayer.”
Sha said the continuing reforms would reduce the cost of compliance, streamline the payment process, and further enhance revenue performance.
