Domestic Value Added Tax (VAT) collection plunged by 26.3 percent in October due to reduced remittances from key sectors, the Kenya Revenue Authority (KRA) reported.
The decline resulted in a Sh2.37 billion deficit, attributed to lower contributions from sectors such as Administrative & Support, Electricity, Oil & Gas, Finance, Professional & Scientific, Transport, and Wholesale & Retail Trade, which typically contribute about 33 percent of domestic VAT.
These sectors accounted for 14.7 percent of turnover sales, while inputs showed only a slight growth of 0.5 percent.
Domestic VAT was one of four tax categories under the Domestic Tax Department (DTD) that recorded weak revenue collection in October.
The private sector’s Pay As You Earn (PAYE) remittances also fell short by Sh1.21 billion, mainly due to large taxpayer office (LTO) clients using refunds to offset liabilities and reduced monthly cash payments per employee.
Further, Domestic Excise Duty fell by Sh573 million, impacted by lower remittances from manufacturers of beer, bottled water, tobacco, and soft drinks.
