Kenya’s tax revenue rises 14.85pc to Sh258.3bn in September

Nairobi, Kenya – Tax revenue in Kenya climbed 14.85 percent to Sh258.31 billion in September, providing a boost to government income amid mounting pressure to meet fiscal targets and fund rising spending, according to the National Treasury's update. The Treasury's third-quarter fiscal performance, covering the period of the 2026/27 financial year, showed ongoing reliance on borrowing and external financing to support spending obligations.

Domestic borrowing totaled Sh101.72 billion, while external loans and grants contributed Sh54.05 billion. Non-tax revenue accounted for Sh13.95 billion, with other domestic financing contributing Sh364.39 million. September's tax collection was part of a wider revenue recovery observed in the first quarter. Overall revenue, including tax and non-tax receipts, rose by 14.4 percent to Sh655.8 billion from Sh573.5 billion in the same period last year.

Tax revenue collected amounted to Sh258.31 billion, a 14.85 percent increase. The Kenya Revenue Authority fell short of its ordinary revenue target by Sh58.2 billion for the first quarter, reflecting the difficulty of converting stronger collections into sufficient funding for the national budget. Income tax collections lagged, falling Sh16.3 billion short of the target.

Excise duty receipts also fell short, while import duty exceeded its target. Public debt service totaled Sh109.66 billion, and county governments received Sh40.66 billion through the equitable share. The government faces competing demands, needing to fund essential services and development projects while meeting debt obligations.

Kenya's annual tax revenue target for the 2026/27 financial year is approximately Sh2.86 trillion, but the Treasury has adjusted revenue projections due to slower economic growth. The September performance will be evaluated based on the annual growth in collections and whether the tax authority can close the budget shortfall without further increasing borrowing.