The Kenya Revenue Authority (KRA) has surpassed KSh 2 trillion in total tax collections as of March 31, 2026, reaching KSh 2.038 trillion during the third quarter of the 2025/26 financial year. This represents 96.1% of its target of KSh 2.122 trillion.
The authority reported an 11.4% increase in revenue, collecting KSh 1.829 trillion compared to KSh 1.629 trillion in the previous financial year. KRA attributed this growth to enhanced tax compliance and the adoption of digital systems, despite a challenging economic environment characterized by high costs and reduced demand.
KRA noted that these improvements stem from ongoing reforms aimed at simplifying tax processes, strengthening digital integration, and using data-driven systems to make tax administration more efficient.
So far, the agency has achieved about 69% of its annual revenue goal of KSh 2.97 trillion, leaving approximately KSh 932 billion to be collected in the final quarter.
Revenue collection has shown steady growth across all three quarters, reflecting improved compliance and gradual economic recovery. Customs revenue performed strongly, generating KSh 733.7 billion and exceeding its target, with a 13.3% year-on-year increase.
Domestic taxes remained the largest source of revenue, contributing KSh 1.301 trillion between July 2025 and March 2026, marking a 10.4% rise compared to the same period last year.
Additionally, KRA collected KSh 204.45 billion on behalf of other government agencies, surpassing its target and recording a 10.7% increase from the previous year.
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Revenue allocated to the National Treasury stood at KSh 1.834 trillion, achieving 95.5% of its target and reflecting an 11.5% growth compared to the same period in the prior financial year.
However, economic conditions continue to pose challenges. Although economic growth improved to 4.9% in the third quarter of 2025, inflation remained at 4.4% in March 2026, driven mainly by rising costs of food, transport, and housing. These pressures have affected consumer spending and business activity, ultimately influencing tax collection.
Looking ahead, KRA faces potential risks in the final quarter, particularly due to instability in the Middle East. This could disrupt petroleum imports, which typically generate about KSh 30 billion in monthly taxes, as well as broader imports from the region that contribute significantly to annual tax revenues.
