Kenya Reduces Annual Revenue Target by 5% for 2018-19 Year

(Bloomberg) -- Kenya cut its revenue target for this fiscal year by 5 percent to 1.61 trillion shillings ($15.7 billion), the second year in a row the East African nation is revising its tax goal downward.

The Kenya Revenue Authority initially sought to raise 1.69 trillion shillings in the year through June 2019, Treasury Secretary Henry Rotich said in a notice in the official gazette. It collected 1.37 trillion shillings in the previous period, missing a twice-lowered target of 1.415 trillion shillings.

Factors such as bleak corporate earnings and job cuts “collectively mean the overall economic activity gets cut, thus net collections are projected downward,” said Deepak Dave, founder of Nairobi-based Riverside Capital Advisory. The inability of the agency to effectively collect various new levies introduced this fiscal year may also have prompted the cut, he said.

Tax income rose 9.2 percent to 555.7 billion shillings in the five months through November, according to the notice. Kenya spent 254.2 billion shillings of that amount on public debt service and expects to repay 870.6 billion shillings in the full-year period.

To contact the reporter on this story: David Herbling in Nairobi at dherbling@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Helen Nyambura, Hilton Shone

©2019 Bloomberg L.P.