Kenya’s tax collections closed 2025 on a historic high, with the Kenya Revenue Authority (KRA) posting its strongest monthly performance ever in December.
According to official data, KRA collected Ksh 251.52 billion in December 2025, marking the highest monthly revenue haul in the agency’s history.
The figure represents a 15.88 per cent increase compared to the same period in 2024 and is 2.09 per cent higher than the previous record of Sh246.36 billion recorded in June 2025.
The strong performance reflects intensified enforcement and improved compliance, particularly in the final quarter of the year when several policy and administrative changes were rolled out. Analysts say the December surge suggests many taxpayers moved to regularise their affairs ahead of year-end deadlines and compliance checks.
One of the key drivers was the introduction of automated payment plans in November 2025. The new system allows taxpayers with outstanding liabilities to settle their dues in instalments spread over a period of up to six months. The move eased cash flow pressure on businesses and individuals, while still ensuring revenue flows to the Exchequer.
eRITS
Earlier, in September, KRA rolled out the Electronic Rental Income Tax System (eRITS), aimed at tightening compliance in the real estate sector. The government has set an ambitious target of raising Ksh 100 billion annually from rental income tax, a segment that has historically been difficult to monitor due to widespread under-declaration.
In October, the authority further tightened compliance rules by making eTIMS compliance mandatory for the issuance of a Tax Compliance Certificate (TCC). At the same time, the VAT Special Table was elevated as a critical factor in determining TCC approval. These changes likely pushed many businesses to clear outstanding tax issues, as a valid TCC is required to secure government contracts, access credit, and conduct various commercial transactions.
Beyond tax revenues, overall Exchequer performance for December 2025 showed mixed financing sources. Non-tax revenue amounted to Ksh 39.93 billion, while domestic borrowing stood at Ksh 47.77 billion. External loans and grants contributed Ksh 4.94 billion during the month, alongside Ksh 15.18 billion from other domestic financing sources.
On the spending side, recurrent expenditure reached Ksh 214.57 billion, reflecting the government’s ongoing obligations such as salaries, operations, and subsidies. Development expenditure stood at Ksh 23.2 billion, highlighting continued pressure on capital spending amid fiscal consolidation efforts. County governments received Ksh 35.28 billion as their equitable share for the month.
Public debt servicing remained a significant burden on the budget, consuming Ksh 75.84 billion in December alone. The figure underscores the growing cost of debt repayments and the pressure it continues to place on government finances.
The record-breaking December performance provides a boost to government revenue targets but also highlights the reliance on stricter enforcement and compliance measures.
Whether the momentum can be sustained in 2026 will depend on economic conditions, taxpayer confidence, and the continued rollout of digital tax systems.
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