Abstract

The government of Kenya has delegated the mandate of collecting revenue to the Kenya  Revenue Authority (KRA). The government depends on this revenue to fund its projects and provide invaluable services to its citizens. Every fiscal year, the Ministry of Finance through treasury projects the estimated amount of revenue they expect KRA to collect to supplement its budget. However, each year KRA tax revenue collection has fallen short of the expectations. Kenya’s failure to collect sufficient revenue to fund its budget has led to an over-reliance on foreign debts to deliver on its agenda. Servicing foreign debts has pushed the government to cut back on crucial services leading to a high cost of living. There is a growing concern about the gap between the number of eligible taxpayers and the actual tax-paying population in Kenya. Studies across the board indicate that in most countries, especially in Africa, only a small portion of a given country’s population pays taxes. The Kenya Revenue Authority (KRA)  data indicates that the number of taxpayers who filed the annual income tax returns by June  2019 was about 3.6 million. With a population size of over  47 million Kenyans, this number represents a mere  7.6  percent of the total population. This disturbing trend can only point to one thing; only a small portion of the Kenyan population is burdened with driving the economy. This research seeks to answer the questions: Why does KRA revenue collection fall short of the projected target?  and  How can KRA effectively expand its tax base? KRA reports and data, News articles, journals, critical essays, books/book chapters, and newspaper reports are examined to answer the questions.  This  Research Paper concludes that KRA has been missing out on its targets because of a small tax base, deliberate and abetted tax evasion schemes, and ineffective revenue collection strategies. It will require sensitizing Kenyans on their tax compliance obligation and collaboration between KRA and other agencies to eliminate tax evasion in Kenya.


Keywords: Kenya Revenue Authority