Kenya’s tax collection continued to show resilience in the six months leading up to December 2025, with the Kenya Revenue Authority reporting an additional Sh10 billion compared to the same period last year.
The growth was boosted by stronger enforcement, improved digital systems, and a surge in final-quarter collections, according to Treasury records.
December 2025 stood out as the most productive month of the year for KRA, with Sh251.52 billion collected, setting a new monthly record. Analysts attribute the strong performance to intensified compliance efforts and the deployment of modern tax management tools in the last quarter.
Compared to December 2024, the collection increased by 15.88 per cent and also exceeded the previous high of Sh246.36 billion posted in June 2025 by 2.09 per cent.
Treasury figures show that cumulative revenue for the six months to December reached over Sh1.25 trillion, up from Sh1.24 trillion in the same period of 2024. The Sh10 billion rise reflects a strong push in the last quarter, driven by tighter enforcement and digital innovations aimed at broadening the tax base.
“Ordinary revenue accounted for the bulk of inflows, driven largely by income taxes, value added tax and import duties, as economic activity remained resilient despite a tight fiscal environment,” the Treasury data reveals.
In November, KRA introduced automated payment arrangements, allowing taxpayers to settle outstanding debts through instalments spread over six months, easing compliance burdens for many businesses.
Earlier in September, the government launched the Electronic Rental Income Tax System (eRITS), aimed at streamlining the assessment and collection of rental income tax, a sector historically difficult to monitor. The Treasury has projected that rental income could contribute up to Sh100 billion annually once fully captured.
In October, KRA further tightened compliance rules by making adherence to the electronic Tax Invoice Management System (eTIMS) a requirement for obtaining a Tax Compliance Certificate. At the same time, the VAT Special Table became a critical factor in issuing the certificates, prompting firms to regularise their tax affairs before the year-end.
“Beyond tax revenues, the Exchequer recorded Sh39.93 billion in non-tax revenue in December,” the official statement shows.
National Treasury Cabinet Secretary John Mbadi noted in the revenue and expenditure update that while stronger collections have improved the government’s cash position, spending demands continue to exceed income, making borrowing necessary to cover the fiscal gap.
During the period, domestic borrowing was the main financing source, with Sh47.77 billion raised locally. External loans and grants stood at Sh4.94 billion, complemented by Sh15.18 billion from other domestic financing mechanisms.
Government spending rose sharply, as recurrent obligations and debt servicing absorbed a large share of the funds, leaving development spending constrained. Net Exchequer disbursements during the six months exceeded Sh1.3 trillion to cover government operations, statutory transfers, and public debt commitments.
Recurrent expenditure remained the dominant component, with wages, pensions, interest payments, and transfers to county governments consuming most of the funds. Development projects continued to face delays and reduced allocations amid fiscal consolidation efforts.
Transfers to county governments under the equitable share totalled Sh35.28 billion, while public debt servicing accounted for Sh75.84 billion, highlighting the ongoing pressure of debt obligations despite the strong performance in revenue collection.
