KRA misses target by 28B!

[RV Pundit]

• Tweet

They collected 92% of the target....not good..

The Kenya Revenue Authority collected about Sh300 billion in the first three months of the current financial year against a target of Sh328 billion.

http://www.businessdailyafrica.com/kra-reports-Sh28bn-first-quarter-revenue-shortfall-/-/539552/2935174/-/1595jc9/-/index.html

[gout]

sounds like serious tax revolt.....

The taxman collected only Sh65 billion from Pay As You Earn (PAYE)

65b in PAYE against an adult population of 20 million!!!

Businesses have also been submitting lower corporate taxes, paid in installments, due to a flattening out or a drop in earnings.

More profit warnings on the way

[Globalcitizen12]

Poor commodity prices and collapse of tourism has doomed the economy.. it will take 3 more years to get back on track. Tax evasion too is at all time high. There is no way people will pay taxes if they think GOK will steal or misuse the funds. Tax compliance requires goodwill of taxpayers

[RV Pundit]

which commodity prices..considering we don't do much export of the commodities.I agree on the goodwill and tourism part too. But I don't know why the panic...considering 92% is about the range KRA oscillate in terms of actual versus projected.

Poor commodity prices and collapse of tourism has doomed the economy.. it will take 3 more years to get back on track. Tax evasion too is at all time high. There is no way people will pay taxes if they think GOK will steal or misuse the funds. Tax compliance requires goodwill of taxpayers

[Globalcitizen12]

Tea coffee and other agricultural commodities have not been performing well specifically last year. These problems are as a result of poor economic performance and management since 2013.  they are not short term cyclical economic problems. In addition Kenya is still spending on military occupation of Somalia. The resultant smuggling from Somali market is hurting Kenya industries and taxes. Remember Dubai is now the largest Kenyan financial capital. Anyone in logistics now has kismayu as a port to smuggle in goods tax free from Dubai. I bet you none of Somali cartels and money laundrelers are paying taxes on good from Dubai   

[RV Pundit]

For the last 1yr tea has been better than ever...Coffee has not had any slump..horticulture as recovered. The dollar strengthening mean our commodities are cheaper.

The only sector that I know is still struggling is tourism sector. The situation with Somalia and Kismayu has not changed...and our expenditure in the war are underwritten by AMISON/UN.

On the positive side...oil price are dirty cheap...and that should ease the pressure on the import side of things.

So once again the question remain...why was the a slump in Q1 of KRA election. My answer the slump is within the usual trend. 

What has happened in the last few months is undoubtedly the rising dollar! I cannot find anything else that make sense.

The idea that economy has been mismanaged since 2013 is an empty political statement not supported by any data...from any credible institution begin from WB, IMF, KNBS and name them...on the contrary the economy has been growing at 5.5% on average since 2013 and all the macro-economic numbers have been healthy.

Tea coffee and other agricultural commodities have not been performing well specifically last year. These problems are as a result of poor economic performance and management since 2013.  they are not short term cyclical economic problems. In addition Kenya is still spending on military occupation of Somalia. The resultant smuggling from Somali market is hurting Kenya industries and taxes. Remember Dubai is now the largest Kenyan financial capital. Anyone in logistics now has kismayu as a port to smuggle in goods tax free from Dubai. I bet you none of Somali cartels and money laundrelers are paying taxes on good from Dubai   

[Globalcitizen12]

Dollar has appreciatedhttp://finance.yahoo.com/news/why-us-dollar-could-strengthen-174950631.html that is why African countries are struggling with Forex issues.. Commodity prices fell last year Tea prices just recovered this year but they were down tremendously last year. Coffee prices are down. The economic effect of that price slump is being felt now. Remember cash flow issues are not usually caused by immediate slump but an ongoing slump. My guess is that Kenya has been burning cash for the last 2 years and running deficits that were not apparent. Jubilee knew they were in trouble economically two years ago and started austerity measures but they hoped the macroeconomic environment would improve
 what they did not anticipate is the global economic shock due to china economic problems early this year.. This shock killed rattled most of the global players. Countries started self preservation measures by cutting down spending. In Mining for example Kenya has partnered with Australia which has access to china market so you can see why china fits in this

Jubilee was getting credit from china right and left now that credit is not available as china tries to dial back and save the homeland

[RV Pundit]

This just doesn't make sense to me. I concede the only key changes in the last few months have been strengthening of the dollar and the chinese economy problems. Has the gov had any problem with borrowing..no..the problem right now seem to be the interest rates and forex risk.

I think this is just a storm in the tea cup.

Dollar has appreciatedhttp://finance.yahoo.com/news/why-us-dollar-could-strengthen-174950631.html that is why African countries are struggling with Forex issues.. Commodity prices fell last year Tea prices just recovered this year but they were down tremendously last year. Coffee prices are down. The economic effect of that price slump is being felt now. Remember cash flow issues are not usually caused by immediate slump but an ongoing slump. My guess is that Kenya has been burning cash for the last 2 years and running deficits that were not apparent. Jubilee knew they were in trouble economically two years ago and started austerity measures but they hoped the macroeconomic environment would improve
 what they did not anticipate is the global economic shock due to china economic problems early this year.. This shock killed rattled most of the global players. Countries started self preservation measures by cutting down spending. In Mining for example Kenya has partnered with Australia which has access to china market so you can see why china fits in this

Jubilee was getting credit from china right and left now that credit is not available as china tries to dial back and save the homeland

[Globalcitizen12]

We will see.. right now the 75 billion borrowed should stabilize rates but are the fundamentals good? as you know coming up with proper statistics on Kenya economy is tricky because of a large section of the economy being informal. I think Kenya will do well but CBK will have to do a lot of hard tackles especially in the bank sector to make sure there stability in that sector. El Nino is another wild card that may end up damaging a lot of infrastructure and making most of the tourist areas inaccessible eg Mara.. In 1997 and years past roads have been badly damaged by heavy rains

[Globalcitizen12]

http://www.the-star.co.ke/news/low-global-demand-slows-base-titaniums-exports

[RV Pundit]

There are all sort of short terms risk but I generally think the fundamentals of the economy are still rock solid.

We will see.. right now the 75 billion borrowed should stabilize rates but are the fundamentals good? as you know coming up with proper statistics on Kenya economy is tricky because of a large section of the economy being informal. I think Kenya will do well but CBK will have to do a lot of hard tackles especially in the bank sector to make sure there stability in that sector. El Nino is another wild card that may end up damaging a lot of infrastructure and making most of the tourist areas inaccessible eg Mara.. In 1997 and years past roads have been badly damaged by heavy rains