Kenya Revenue Authority faces a daunting challenge: collecting some KSh1.7 trillion (about USD13.2 billion) in the remaining seven months of the 2025/26 financial year to reach its annual target of KSh2.63 trillion (about USD20.4 billion), against a backdrop of economic headwinds and taxpayer fatigue.
Kenya Revenue Authority gathered KSh909.77 billion (about USD7.05 billion) in the first five months from July to November 2025 — roughly a third of the yearly goal — leaving a steep uphill climb to June 2026.
National Treasury data shows November collections rose 8.2% year-on-year to KSh173.5 billion (about USD1.35 billion), offering a glimmer of momentum. Yet the slow start has reignited concerns about fiscal slippage in East Africa’s largest economy, where public debt exceeds 70% of GDP and the government is under pressure to narrow the budget deficit.
Kenya Revenue Authority Commissioner General Humphrey Wattanga has expressed guarded optimism, pointing to the authority’s success in the previous financial year. In 2024/25, Kenya Revenue Authority exceeded its KSh2.555 trillion (about USD19.8 billion) target by KSh16 billion (about USD124 million), collecting KSh2.571 trillion (about USD19.9 billion) despite global shocks and domestic challenges — a 6.8% growth that marked a rare overperformance.
“We remain focused on widening the tax net through compliance and technology rather than burdening existing taxpayers,” Wattanga said in recent statements, echoing his assurances to lawmakers.
Ambitious targets amid recovery
The current year’s target reflects the government’s delicate balancing act. After youth-led protests in 2024 forced the withdrawal of controversial tax hikes in the Finance Bill, President William Ruto administration has pursued incremental measures while relying heavily on Kenya Revenue Authority efficiency.
The 2025/26 budget aims to cut the fiscal deficit to 4.8% of GDP from 5.7%, partly through higher ordinary revenues projected at around KSh2.75 trillion (about USD21.3 billion) in some estimates, though Kenya Revenue Authority’s effective target stands at KSh2.63 trillion (about USD20.4 billion).
Economic slowdowns have complicated the task. High interest rates to combat inflation — which hovered above 5% through much of 2025 — have curbed consumer spending and business investment. Sectors like manufacturing and retail report reduced turnover, directly impacting Value Added Tax and excise duty collections.
Small businesses, a key growth driver, struggle with compliance amid rising costs, while tax disputes and court cases delay billions in potential revenue.
Digital push and enforcement
Kenya Revenue Authority is doubling down on digital tools to bridge the gap. The electronic Tax Invoice Management System, rolled out amid initial resistance from informal traders, is being expanded to capture more transactions in real time.
Upgrades to the iTax platform aim to ease filing while flagging discrepancies. Increased audits target high-risk sectors, and collaborations with agencies like the Kenya Bureau of Standards and police seek to curb smuggling at borders — a perennial leakage point.
Customs collections hit a monthly record of KSh85 billion (about USD659 million) in September 2025, signalling potential in trade-related revenues as port efficiencies improve.
Lawmakers, led by the National Assembly Finance Committee, have urged “aggressive but fair” mobilisation. Committee chair Kuria Kimani has stressed the need for taxpayer rights alongside investments in Kenya Revenue Authority staff training and technology.
Broader fiscal stakes
The stakes extend beyond numbers. Failure to meet targets could force renewed domestic borrowing, pushing up debt servicing costs that already consume a large chunk of revenues. Kenya, under an International Monetary Fund programme, has committed to fiscal consolidation to unlock further lending and stabilise the shilling.
Yet analysts caution that aggressive enforcement risks alienating taxpayers still recovering from post-COVID shocks and 2024 political unrest. “Kenya Revenue Authority success last year bought goodwill, but another shortfall could erode trust,” said one Nairobi-based economist.
As the December-June sprint begins, all eyes are on Kenya Revenue Authority. With seasonal peaks in corporate tax payments and year-end trade, the authority has windows of opportunity. But in a nation where youth unemployment lingers above 35% and cost-of-living pressures persist, the taxman’s race is as much about economic recovery as revenue.
Wattanga team insists it is on course. Whether Kenya’s taxpayers — and the economy — can deliver remains the critical question in this high-stakes fiscal drama.
