Revenue performance


Post Date: 15 March 2017   |   Category: General   |   Hits: 639


Every financial year the government presents the budget estimates to parliament for approval. The estimates are based on the target revenue that the government anticipates to raise in order to meet its expenditure needs. This brief assesses the performance of the revenue against the target. The analysis aims at revealing the extent to which the budget targets are realistic and also sources of revenue that ought to be improved to maximize tax collection. 


Government revenue as a share of the target, July 2016 - Dec 2016
Source: National Treasury (Quarterly Economic Budgetary Review 1ST and 2nd Quarter, 2016)
 
The chart illustrates shares of the actual revenue for July 2016 to December 2016 with reference the target. The sources of revenue are classified under the above twelve main categories, they comprise investment revenue, Value added tax (VAT), Income tax , Appropriation in Aid, Traffic and external grants. 
 
It is revealed that investment revenue , which encompasses the amounts earned on money invested, often, interest and dividends earned on a company's investment in stocks and bonds, has high performance, 83% above the target. The second-high performing revenue is local VAT which registered 10% more revenue above the target. On other hand, external grants, traffic revenue and taxes on internal trade are among the tax revenues, in which the government is under performing.
 
Number of the week: 14% actual revenue collected from the external grants
 
  • The total actual revenue collected for the first half of 2016/17 was Ksh 995 billion, representing 92% of the target.
  • Investment revenue, Local VAT, Other Income tax (mainly corporation tax) and Excise duty are among the taxes that are performing above the average.
  • PAYE, Import duty and VAT on imports, though are below the average, they are however, performing highly, approximately 90% of the target.
  • It is noticeable that external grants and revenue from traffic are underperforming; actual revenue collected from external grants is 14% of the target while that collected from the traffic is 66%.