The Kenya Revenue Authority (KRA) registered a historic gross VAT collection, reaching a monthly revenue of Kshs. 34-552 billion in January 2025.
According to the agency, this tax head set a new collection record, exceeding previous amounts with Kshs 30.636 billion in January 2024, which was the second-highest collection for that month.
KRA attributes this record collection to reforms the institution has been implementing. Chiefly, KRA credits “the implementation of VAT Auto-Population of Returns, which has contributed to enhanced revenues.”
The auto-populated VAT return is a simplified VAT filing process where the Kenya Revenue Authority (KRA) pre-fills VAT returns with tax information from iTax, TIMS, eTIMS, and the customs business systems.
In March 2024, the auto-populated (prefilled) VAT return was introduced as part of efforts to close VAT compliance gaps and enhance the filing experience for taxpayers.
This initiative streamlines VAT return filing and boosts compliance. Its introduction marked a significant shift from manual VAT return preparation using data analysis to auto-populating returns with integrated data from KRA’s digital platforms, reducing the burden on VAT-registered taxpayers.
Alongside this, the agency is exploring the potential of a fully web-based VAT return system and a taxpayer dashboard to offer real-time insights into sales and purchases for each taxpayer. These ongoing changes aim to enhance transparency, improve efficiency, lower compliance costs, and strengthen revenue performance.
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The improved VAT performance was primarily fueled by the energy sector, where remittances from oil marketers surged by 121.6%. The manufacturing sector also played a significant role, with substantial growth in remittances from key industries, including beer (10.5%), soft drinks (115.6%), tobacco (9.5%), sugar (121.5%), and wines & spirits (12.9%).
KRA exceeded its target by Ksh 556 million, demonstrating a strong performance rate of 101.6%. This signifies a 12.8% increase compared to the same period in the previous fiscal year.
