KRA Collects Record KES 2.844 Trillion as Manufacturing, Energy and ICT Drive Strongest Revenue Growth in Years

By Our Reporter Maurice Momanyi

NAIROBI, Kenya, July 10, 2026 — The Kenya Revenue Authority (KRA) has announced its strongest revenue growth in recent years after collecting KES 2.844 trillion during the 2025/2026 Financial Year, marking a 10.6 percent increase from the KES 2.572 trillion collected in the previous financial year.

The record performance saw the tax authority exceed the previous year’s growth rate of 6.8 percent, with collections increasing by KES 272.953 billion despite what KRA described as a challenging economic environment.

According to the Authority, the impressive growth was largely driven by five key sectors of the economy—Manufacturing, Energy, Financial and Insurance Services, Information and Communication Technology (ICT), and Wholesale and Retail Trade—which together accounted for 62 percent of all revenue collected during the financial year.

Manufacturing emerged as the largest contributor, generating KES 462 billion, representing 16.2 percent of total revenue and a 9.2 percent growth from the previous year. KRA attributed the sector’s performance to strong collections from Value Added Tax (VAT), Pay As You Earn (PAYE), Excise Duty and Corporation Tax, which together accounted for nearly three-quarters of the revenue generated from manufacturers.

The Energy sector followed closely, contributing KES 445 billion, equivalent to 15.6 percent of total revenue. Collections from the sector grew by 9.1 percent, largely supported by improved customs oil tax collections.

The Financial and Insurance sector generated KES 320 billion, contributing 11.3 percent of KRA’s total collections. Corporation Tax remained the biggest revenue stream within the sector, alongside Withholding Income Tax and PAYE.

Meanwhile, the ICT sector continued its steady expansion, recording collections of KES 248 billion, a 7.9 percent increase from the previous financial year. Revenue was driven by excise taxes on airtime and financial services, Corporation Tax, Domestic VAT and PAYE.

The Wholesale and Retail Trade sector rounded off the top contributors with KES 288 billion, registering a healthy 10.3 percent growth compared to the previous financial year.

Strong Performance Across Revenue Streams

KRA reported that Exchequer Revenue, which finances government expenditure, rose by 10.5 percent to KES 2.568 trillion, achieving 95.2 percent of its revenue target.

In addition, Agency Revenue—funds collected on behalf of other government institutions—grew by 11.2 percent to KES 276.139 billion, translating to an impressive 99.1 percent performance against target.

Customs operations delivered one of the Authority’s strongest performances during the year, surpassing expectations with a 100.8 percent performance rate after collecting KES 988.78 billion. Customs revenue increased by 12.4 percent, driven by strong growth in both oil and non-oil imports.

Domestic revenue collections also recorded solid growth, rising 9.7 percent to KES 1.851 trillion, although collections fell short of the annual target, achieving a 93 percent performance rate.

Corporation Tax, Betting Taxes Record Major Growth

Among individual tax categories, Corporation Tax recorded one of the strongest performances, growing by 14 percent to KES 347.066 billion. Nearly half of the collections originated from the ICT, manufacturing, transport, energy and wholesale sectors, reflecting improved profitability across major industries.

Banks also posted stronger profits, with remittances from the banking sector growing by 11.1 percent, accounting for over one-quarter of all Corporation Tax collected.

The betting industry also delivered impressive results. Excise Tax on betting services exceeded its target by more than KES 2.2 billion, generating KES 16.527 billion and registering 24.9 percent growth. Betting Tax and Withholding Tax on betting and gaming also recorded significant increases.

Domestic VAT collections climbed to KES 355.255 billion, while PAYE generated KES 598.807 billion, although KRA noted that PAYE growth continued to be affected by a gradual decline in formal sector employment over recent years.

The Authority also reported that collections from the Significant Economic Presence Tax (SEPT)—formerly Digital Service Tax—doubled to KES 1.609 billion following changes introduced under the Finance Act 2025 that expanded the tax’s scope to cover more digital transactions.

Technology Driving Compliance

KRA credited much of the improved performance to aggressive digital transformation initiatives aimed at enhancing tax compliance while making it easier for taxpayers to meet their obligations.

The Authority said more than 750,000 taxpayers have now been onboarded onto the Electronic Tax Invoice Management System (eTIMS), strengthening VAT compliance and improving visibility of commercial transactions.

Integration between iTax and the Integrated Customs Management System (iCMS) has also enabled real-time monitoring of taxpayer activities while improving data sharing across domestic and customs operations.

KRA further highlighted the introduction of pre-populated tax returns, AI-powered analytics, non-intrusive cargo scanners and expanded electronic invoicing as key innovations helping seal revenue leakages and detect tax fraud.

To improve taxpayer services, the Authority expanded digital platforms including a WhatsApp chatbot, the *USSD service (222#) and the e-Customs mobile application, enabling taxpayers and traders to register, file returns and clear cargo more efficiently.

Compliance Measures Yield Billions

The Authority said several compliance initiatives significantly boosted collections during the year.

Through its Tax Base Expansion Programme, KRA collected KES 9.1 billion by registering new taxpayers, identifying inactive taxpayers and recruiting landlords through the Block Management System.

Debt recovery efforts generated KES 144.824 billion, while integration with the government’s Integrated Financial Management Information System (IFMIS) strengthened tax collection from suppliers doing business with government agencies.

The integration of betting companies into KRA systems also provided real-time visibility of transactions from 143 betting firms, contributing to improved excise tax collections.

Alternative Dispute Resolution mechanisms enabled KRA to conclude 993 tax disputes, unlocking KES 35.062 billion, while its anonymous reporting platform iWhistle facilitated the recovery of KES 3.2 billion from 908 reported cases involving tax evasion and corruption.

KRA also reported improvements in trade facilitation, reducing the average cargo clearance time to 42.3 hours, surpassing its performance target.

Looking Ahead

For the 2026/2027 financial year, KRA plans to deepen technology adoption by expanding electronic invoicing, introducing real-time revenue monitoring through Electronic Tax Registers and strengthening artificial intelligence-driven tax administration.

The Authority also intends to establish a Data Analytics Centre of Excellence, implement enhanced revenue assurance frameworks and develop information-sharing systems to combat tax evasion, including cross-border tax risks.

KRA says the reforms are expected to strengthen voluntary tax compliance, improve taxpayer experience and support sustainable economic growth.

In its closing remarks, the Authority thanked Kenyan taxpayers for their resilience and continued compliance despite economic challenges, noting that voluntary tax payment remains critical in financing government services and supporting Kenya’s long-term development.

The Commissioner General reaffirmed KRA’s commitment to simplifying tax administration, improving customer service and maintaining the highest standards of integrity and professionalism in all interactions with taxpayers.