Kenya’s New Collection System Boosts Revenue by Sh.18.5 Billion

Kenya’s implementation of a single paybill system (222222) for government services has significantly bored fruits, bolstering its revenue collection by Sh18.5 billion to reach Sh111.3 billion in the quarter ending September 2024. This figure exceeds State target by 28.8%.

This significant improvement is credited Kenya’s ability to adapt digital system and centralization of over 15,000 government services through e-citizen since 2023, allowing Treasury to better track cash flows and prevent agencies from collecting payments through separate accounts.

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The Kenya Revenue Authority (KRA), however faced serious challenges in tax collection, despite AiA collections flourishing in this commendable way.

KRA however, fell short of its Sh605.5 billion target by Sh14.6 billion during the first quarter of 2024/25 fiscal year, with underperformance across all tax categories including VAT, Excise Duty, Import Duty, and Pay-As-You-Earn.

Nevertheless, overall tax collections
showed a 10% improvement compared to the same period in the previous fiscal year, increasing by Sh54 billion despite missing targets.

This disparity suggests that while technological advancements can bolster certain revenue streams, they cannot singularly address broader economic challenges affecting tax compliance and collection.

Therefore, a multifaceted approach, combining technological innovation with robust economic policies, is imperative to achieve comprehensive fiscal health.