The Kenya Revenue Authority (KRA) has crossed a major milestone, surpassing the Sh2 trillion mark in cumulative revenue collection by the end of the third quarter of the 2025/26 financial year.
As of March 31, 2026, KRA had collected Sh2.038 trillion against a target of Sh2.122 trillion, translating to a performance rate of 96.1 percent and an impressive 11.4 percent growth compared to the same period in the previous financial year.
This achievement signals not only improved tax compliance but also growing resilience in Kenya’s economy despite prevailing global and domestic challenges.
Strong Growth Driven by Reforms
According to KRA Commissioner General Humphrey Wattanga, the performance reflects deliberate institutional reforms aimed at simplifying tax compliance and enhancing efficiency.
He noted that KRA has increasingly integrated tax systems into everyday economic activity through data-driven approaches, making it easier for businesses and individuals to comply.
“Revenue collection maintained steady quarter-on-quarter growth across all three quarters,” Wattanga said, adding that the consistent trend points to improving compliance and gradual economic recovery.
The authority collected Sh1.829 trillion during the same period in FY 2024/25, highlighting a steady upward trajectory in revenue mobilisation.
Customs and Domestic Taxes Lead
KRA’s revenue growth was anchored by strong performance in both domestic taxes and customs collections.
Customs and Border Control emerged as a key driver, surpassing its target with a performance rate of 100.9 percent. The department collected Sh733.7 billion, marking a 13.3 percent increase from Sh647.6 billion recorded in the previous financial year.
Domestic taxes remained the largest contributor, bringing in Sh1.301 trillion between July 2025 and March 2026, representing a 10.4 percent growth year-on-year.
Additionally, KRA collected Sh204.452 billion in agency revenue on behalf of other government entities, exceeding its target and recording a growth of 10.7 percent.
Exchequer revenue collected for the National Treasury stood at Sh1.834 trillion, reflecting an 11.5 percent increase compared to the previous year.
Economic Conditions: Mixed but Improving
KRA’s performance comes against a challenging macroeconomic backdrop.
The country has faced subdued household purchasing power, soft consumer demand, high business costs, and global trade uncertainties.
However, some indicators provided a positive outlook. Kenya’s GDP grew by 4.9 percent in the third quarter of 2025, up from 4.2 percent in the same period in 2024.
Inflation stood at 4.4 percent in March 2026, slightly higher than February’s 4.3 percent, driven largely by rising costs in food, transport, and housing.
Meanwhile, the Kenyan shilling averaged Sh129.23 against the US dollar during the July–March period, helping to moderate imported inflation and support domestic demand.
Digital Innovation Transforming Tax Compliance
A major highlight of KRA’s strategy has been its aggressive push toward digital transformation.
The Electronic Tax Invoice Management System (eTIMS) has played a crucial role in improving transparency and reducing VAT fraud by enhancing invoice tracking and transaction-level accountability.
KRA has also launched GavaConnect, an enterprise API platform that allows businesses, fintech firms, and ERP providers to integrate tax services directly into their systems. With over 2,500 developers onboard, the platform is building a scalable digital compliance ecosystem.
In a move to expand accessibility, KRA introduced a WhatsApp-based tax filing service powered by an AI chatbot named “Shuru.” The service allows taxpayers to file returns, generate invoices, and access compliance certificates directly through the messaging app.
For users without smartphones, a USSD-based solution (*222#5#) has also been rolled out, ensuring that tax services are accessible to a wider population.
Enhancing Transparency and Efficiency
Beyond digital systems, KRA has implemented structural reforms to improve service delivery and accountability.
The introduction of the Centralized Release Office has streamlined cargo clearance processes, boosting customs efficiency and increasing import values.
Non-oil taxes exceeded their target by Sh3.555 billion, recording a growth of 16.9 percent, driven by increased imports of vehicles, cereals, machinery, iron and steel, and fertiliser.
To further enhance transparency, KRA has deployed body-worn cameras for customs officers at verification stations, airports, and border points.
The authority is also adopting a bank agent model to extend its services to underserved areas, ensuring greater accessibility for taxpayers across the country.
The Road to Sh2.97 Trillion Target
With one quarter remaining in the financial year, KRA is now focused on closing the gap toward its annual revenue target of Sh2.97 trillion.
Wattanga emphasized that the authority will intensify compliance measures while sustaining growth momentum.
“KRA remains committed to making compliance simpler, fairer and more seamless while protecting revenue needed for national development,” he said.
Conclusion
KRA’s Sh2 trillion milestone underscores the impact of reforms, digital innovation, and improved compliance in Kenya’s tax system.
While economic challenges persist, the authority’s performance demonstrates resilience and a clear path toward modernizing revenue collection.
As the financial year heads into its final quarter, all eyes will be on whether KRA can bridge the remaining gap and hit its ambitious Sh2.97 trillion target—an achievement that would further cement its role in driving Kenya’s economic stability and growth.