KRA Hits KSh2.844 Trillion in Record Tax Collection

Kenya, July 10 ,2026 - The Kenya Revenue Authority (KRA) has a  Ksh272.95 billion increase in tax collection in the 2025/26 financial year, posting its strongest revenue growth in recent years as collections rose by 10.6%.

The authority announced on Friday that during the financial year that ended on June 30, it collected  KSh2.844 trillion, up from  2.52 trillion the previous financial year.

Five sectors, including Manufacturing, energy, financial services, ICT and the wholesale sector, contributed significantly to the strong performance this year. The five sectors contributed about 62% of the total revenue collected during this period.

The manufacturing sector emerged as the leading horse, generating KSh62 billion, which is a 9.2% increase from the previous financial year, while the energy sector collected KSh444 billion, which represented 9.1% growth largely attributed to strong customs oil tax collections.

The financial and Insurance sector reached KSh320 billion, while the ICT sector contributed KSh248 billion. The wholesale and retail trade generated KSh288 billion according to the taxman.

Exchequer revenue increased by 10.5% to KSh2.568 trillion, achieving 95.2% of its target of KSh2.698 trillion.

On the other hand, agency revenue, which was collected on behalf of other government institutions, rose by 11.2% to KSh276.14 billion, translating to a 99.1% performance against target.

According to the authority, Customs revenue exceeded its annual target after it collected KSh988.78 billion, achieving a performance rate of  100.8%. Domestic revenue, however, reached  KSh1.851 trillion, which is equivalent to 93% of its target.

Despite being affected by the declining rate of formal employment in the country, Pay As You Earn (PAYE) collections grew by 6.7% to KSh598.81 billion.

Domestic VAT collections increased by 8.5% to KSh355.26 billion despite substantial VAT refunds issued to oil sector taxpayers following the reduction of VAT on petroleum products from 16% to 8%.

The authority has also indicated that Corporation tax collections rose by 14% to KSh347.07 billion, an improvement it attributed to increased profitability among companies in the ICT, manufacturing, transport, energy and wholesale sectors and also stronger remittances from banks.

 Betting-related taxes also recorded an improvement, with excise tax on betting services surpassing its target after collecting KSh16.53 billion, a 24.9 per cent increase from the previous financial year.

Significant Economic Presence Tax (SEPT), which replaced the Digital Service Tax, doubled to KSh1.61 billion. This is due to expanded taxation of digital services under the Finance Act 2025.

The authority has attributed the improved revenue performance to increased adoption of technology, which includes the expansion of the eTIMS, integration of tax systems, AI-powered analytics, and simplified tax filing through pre-populated returns.

 Enhanced taxpayer services through digital platforms such as WhatsApp, USSD, and the e-Customs mobile application have also been central to the improved performance.

Other measures, including tax base expansion, debt recovery efforts that realised KSh144.82 billion, real-time integration with government procurement systems, and anonymous reporting of tax evasion through the iWhistle platform, which helped recover KSh3.2 billion from 908 reported cases, also boosted collections.