Tax collection at Sh340 billion in the first quarter of the year

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An analysis by Treasury Secretary Ukur Yatani published on Friday shows the tax receipt in the first quarter of 2020 has amounted to nearly Sh 340.67 billion, which is close to Sh339.27 billion recorded in 2019. 

Companies have reported a decrease in orders during the three months. Businesses in the private sectors have hit the lowest levels in more than two years, according to a close survey that is done monthly.

This was primarily caused by the reduced demand due to shock from the coronavirus pandemic.

Business growth was profoundly affected last in October 2017 when the economy was facing challenges due to the tensions stemming from the historic political wrangles.

Data from the treasury shows the impact on the government revenue was seen more in January when tax receipts totaled to Sh118.35 billion, which was Sh 6.63 billion drops when compared to 2019. 

The tax collections are expected to deepen further in the wake of the coronavirus following the tax reliefs for persons earning up to Sh24, 000 as well as other reliefs such as the reduced value-added tax (VAT) from 14 to 16 percent effected as from April 1st.

Mr. Yatani had proposed to introduce VAT on some essential items like farm inputs, animal feeds, and machinery in an attempt to fill the hole that will be created the presidential directive on the tax reliefs.

However, MPs have rejected most of the proposed measures meant to increase taxation on essential items and supplies, leaving Exchequer in a much deeper hole.


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