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Kenya Revenue Authority Report KSh 2Billion Excess in December Revenue Collection

This is the first time since the onset of the Covid19 pandemic that the agency surpassed its revenue collection target.

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The Kenya Revenue Authority (KRA) has reportedly collected KSh166 billion revenue in December 2020, which pointed to excess in revenue collection by KSh 2 billion.

The revenue collection signified 3.5% higher than the KSh160 billion collected in the corresponding period in 2019, according to a statement on KRA’s website.

This is the first time since the onset of the Covid-19 pandemic that the agency surpassed its revenue collection target. The government agency attributed the increased revenue collection to enhanced economic conditions since the easing of covid-19 restrictions. Efforts by the agency to increase tax compliance also contributed to improved revenue collection.

KRA’s Customs & Border Control (C&BC) Department collected the highest ever monthly revenue collection of Ksh 60.777 billion in December, representing a 40.9% growth in the revenue collected from the same period in 2019.

Read Also: Kenya to Conduct Survey on Diaspora Remittances

Governments efforts to lower exemptions and remissions also yielded results as the tax exemptions and remissions in the customs department fell by 39.3% in December 2020, thereby boosting revenue collection by KSh3.34 billion.

Domestic Taxes had the best performance rate of 91.1% in December, since the onset of Covid-19 in Kenya in March 2020. KRA says that Pay As You Earn (PAYE) taxes hit 99.8% of the set target while Withholding Tax exceeded the target by Ksh 725 million. Corporate taxes also reached 93.5% of the set target.

The Revenue Authority is optimistic that the recovering economy and efforts to increase tax compliance will boost tax revenue collection in 2021. In addition, the introduction of the digital services tax, minimum alternative tax, and voluntary disclosure program will boost KRA’s revenue collection goals.

 

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Southern Africa Business

South Africans Happy with 2021 Budget Presentation

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Anticipation, and many other emotions had run wild among South Africans before Finance Minister, Tito Mboweni read out the 2021 budget proposal. Even organised labour prepared for a showdown protest.

What was the reason for sigh of the relief? South Africa’s government will not increase the personal income tax. Although, the rainbow nation will miss out on $3 billion over the next four years. And, now the South Africa Treasury Department will pay for the COVID-19 vaccination.

But Finance Minister Tito Mboweni announced a 1 percentage point cut in corporate tax from April 2022.

 “We are allocating more than R10-billion ($708 million) for the purchase and delivery of vaccines over the next two years,” Mboweni told the National Assembly.

A further 9 billion rand could be drawn from contingency reserves and emergency allocations, if needed, as the final costs remain uncertain for the vaccines.

However, Mboweni cautioned that the roll-out was likely to gather pace only in the second half of the year, hence the threat of further waves of infection continues to cloud the treasury’s forecast on key indicators.

It is predicted that the country will experience real economic growth of 3.3% in the current year, off the low base of last year’s historic lockdown shrinkage, followed by 1.9% in the outer years.

Meanwhile, the government will increase the excise duties on alcohol and tobacco products by 8%, the National Treasury said on Wednesday.

This comes as the Treasury took a decision to reverse its earlier announcement of additional tax measures that would have raised R40 billion amid a revenue shortfall.

In order to make up for some of the revenue lost by the now-canceled income tax increases, the government will jack up taxes on tobacco products and hard liquor.

A packet of cigarettes will cost R1.39 more. Cigar prices were raised by R7.71 per 23g of a rolled cigar.

Fans of vodka, gin, brandy and whisky will have to dig a little deeper into their pockets as the price of a 750ml bottle is going up by R5.50.

A can of malt beer rises by 14c per 340ml can.

After an estimated 7.2% GDP contraction last year, the prospects of cultivating growth depend on the success of economic stimulus measures and the country’s COVID-19 vaccine roll-out — and the extent to which it allows a full reopening of the economy, the minister said.

The news helped send the South African rand to its highest levels since January 2020. The rand strengthened as much as 1% versus the dollar to 14.3950.

Ten-year local government bond yields rallied to an eight-day low of 8.545%, while some sovereign dollar bonds gained more than 2 cents, according to Tradeweb data.

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All Eyes on Ghana as African Gold Rises Like the Phoenix

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Ghana has become the toast of exploration firms in the continent and is now Africa’s largest gold producer. It churned out 80.5 tonnes in 2008. To prove her worthiness of the title, Ghana has 23 large-scale mining companies producing gold, diamonds, bauxite and manganese.

There are over 300 registered small scale mining groups and 90 mine support service companies. So, apart from earning revenue for Ghana directly, it also ensures many people earn a stable living along the value chain.

Gold production in becoming an important export earner in West Africa.

This is true for countries like Ghana, Burkina Faso and Mali as these nations are expected to increase their export quota by 2.7% in 2021 to 8 Moz (million ounces) and grow to 8.4 Moz (million ounces) by 2024 – a 1.6% compound annual growth rate (CAGR).

After strong growth in 2019, West Africa’s gold production was badly hit by the COVID-19 pandemic in 2020, owing to the temporary suspension of mines such as Fekola in Mali.

The pandemic had a significant impact on African operations, mainly during the early part of the second quarter of 2020, when, at one point, the region’s gold mines were on hold with no production due to COVID-19 lockdowns according to Global Data, a leading data and analytics company.

And Ghana is expected to lead the growth, where the production is expected to reach 3.9moz (million ounces) in 2024 from a forecasted 3.6 Moz in 2021. West Africa’s second largest economy is looking more money in her coffers in 2021.

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Review: “It Should Bother Us That Our Existence Is Tied To Oil” Tunji Andrews Speaks On Recession

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Nigeria’s economy slipped into recession in the third quarter of 2020 with a decline of 3.6 percent, having contracted 6.1 percent in the second quarter, leading to Nigeria’s second recession in five years. An announcement from the National Bureau of Statistics said Gross Domestic Product grew 0.11 percent between October and December from a year earlier. The good news is that the country’s economy exited recession in the fourth quarter of 2020, recording its first growth in three quarters as the coronavirus-linked lockdown was lifted across the country.

Five years, two recessions! GDP growth over the past five years has been unimpressive for such a resource-rich developing country. What is the way forward? How do we begin to fund our budgets and end borrowing which puts the country in huge debt?

Financial analyst, Tunji Andrews insists that there are sectors that have not left recession. “Only four sectors got us out of the last recession and we just barely escaped it because of the price of crude oil. I do not like the chants of victory that I’m hearing from the people in government. We know the facts. Nothing was done structurally to take us out of this recession? What exactly did we do? What did we change? What improvement did we put on the ground? Did we increase revenue or support businesses? WE DID NOTHING! Our existence or livelihood is tied to oil! It should bother us that we are so tied to a commodity.”

It took Saudi Arabia almost 20 years to actively diversify their economy, we have not even really started! This shows that it would take us even longer to get to where we are going.

“To get Nigeria running is to think large scale. We need to attract big industries to come and invest in Nigeria”, Tunji advised.

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